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BONDS: ACGBs Track US Tsys Yields Lower, RBA Minutes Tomorrow

BONDS
BulletMarketsFixed Income Bullets

Aussie bonds yields have opened lower this morning, following gains in Treasuries after US November PCE data printed below estimates across both headline and core readings. There is nothing on the local calendar today, with focus turning to tomorrow's RBA Minutes of Dec. Policy Meeting.

  • Bond traders are facing growing losses this year as the easing cycle is met with rising yields. The US 10yr yield has risen sharply since the Fed began rate cuts in September, marking the biggest jump in yields during the early stages of an easing cycle since 1989. Persistent inflation, resilient economic growth, and Fed signals for slower rate cuts in 2025 have kept long-term bond yields elevated. This environment has favored curve steepener strategies, with the US 2s10s hitting its steepest levels for the year on Dec 19, the AU 2s10s has largely tracked US curves, however trades slightly off its steepest levels as we head into year-end, currently at 47.50bps vs 56bps made Nov 7th.
  • Cash ACGBs are currently trading 3.5bps to 6.5bps cheaper, with the curve bull-flattening this morning. The 2yr is -3.8bps at 3.938%, while the 10yr is -6.3bps at 4.429%. Bonds Futures are lower today, with YM +0.4 & XM at +0.65
  • RBA dated OIS is trading little changed this morning, the first full cut is priced by April with 30.5bps currently priced, with a second full cut expected at the July meeting with 50.9bps currently priced, December 2025 meeting there is a cumulative 72.2bps of cuts priced.
  • The AU-US 10yr spread is 3bps lower at -9.5bps
  • Swap curves are little changed this morning, while the bill strip is +1 to +2

 

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Aussie bonds yields have opened lower this morning, following gains in Treasuries after US November PCE data printed below estimates across both headline and core readings. There is nothing on the local calendar today, with focus turning to tomorrow's RBA Minutes of Dec. Policy Meeting.

  • Bond traders are facing growing losses this year as the easing cycle is met with rising yields. The US 10yr yield has risen sharply since the Fed began rate cuts in September, marking the biggest jump in yields during the early stages of an easing cycle since 1989. Persistent inflation, resilient economic growth, and Fed signals for slower rate cuts in 2025 have kept long-term bond yields elevated. This environment has favored curve steepener strategies, with the US 2s10s hitting its steepest levels for the year on Dec 19, the AU 2s10s has largely tracked US curves, however trades slightly off its steepest levels as we head into year-end, currently at 47.50bps vs 56bps made Nov 7th.
  • Cash ACGBs are currently trading 3.5bps to 6.5bps cheaper, with the curve bull-flattening this morning. The 2yr is -3.8bps at 3.938%, while the 10yr is -6.3bps at 4.429%. Bonds Futures are lower today, with YM +0.4 & XM at +0.65
  • RBA dated OIS is trading little changed this morning, the first full cut is priced by April with 30.5bps currently priced, with a second full cut expected at the July meeting with 50.9bps currently priced, December 2025 meeting there is a cumulative 72.2bps of cuts priced.
  • The AU-US 10yr spread is 3bps lower at -9.5bps
  • Swap curves are little changed this morning, while the bill strip is +1 to +2