Summary:
Australian government bonds ended mixed on August 29, 2025. Short-end yields edged higher, with the 2-year rising 1 bp to 3.33%, while the 10-year dipped 1 bp to 4.27% and the 15-year eased 2 bps to 4.64%; the 5-year was steady at 3.64%. Month-to-date, yields fell 5–7 bps as softer Q2 capex and a weaker July CPI reinforced dovish sentiment, though August’s equity rally tempered aggressive RBA cut bets. U.S. PCE data aligned with Fed easing views, but equity volatility, U.S.-China tariff talks, and Trump’s Fed independence challenge pose risks. Traders watch jobless claims and local indicators for RBA signals
Figure 1: Aust. 3 yr minus 10 yr Bond Spread
Figure 2: Australian & US Bond Yields
Figure 3: US 10-year minus 2-year Bond Spread
