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AUSSIE BONDS: Cash Curve Hovers At Top Of Multi-Year Range

AUSSIE BONDS
RegionGlobalBulletAPACFixed Income BulletsAustraliaMarkets

The cash ACGB curve has flattened by 2bps today to 49bps, after reaching its steepest level since early November 2023 earlier this week. Despite this, the 3/10 curve remains just below the upper range it has traded in since late 2022.

  • With RBA easing expectations already unwound due to stronger domestic economic data, the ACGB 3/10 cash curve has closely tracked the recent upward pressure on the US 10-year Treasury yield. This is reflected in the 30-day correlation between the two, which has shifted back into positive territory after a two-month stretch in negative territory.
  • Since mid-September, the US 10-year yield has climbed by as much as 65bps. During the same period, the ACGB 3/10 cash curve steepened by approximately 15bps, underscoring the strong influence of global yield dynamics on Australian bond markets.
  • However, the local economic outlook may soon play a larger role, with the release of Q3 CPI data next Wednesday likely to provide fresh insights and potentially shift market expectations once again. 

 

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The cash ACGB curve has flattened by 2bps today to 49bps, after reaching its steepest level since early November 2023 earlier this week. Despite this, the 3/10 curve remains just below the upper range it has traded in since late 2022.

  • With RBA easing expectations already unwound due to stronger domestic economic data, the ACGB 3/10 cash curve has closely tracked the recent upward pressure on the US 10-year Treasury yield. This is reflected in the 30-day correlation between the two, which has shifted back into positive territory after a two-month stretch in negative territory.
  • Since mid-September, the US 10-year yield has climbed by as much as 65bps. During the same period, the ACGB 3/10 cash curve steepened by approximately 15bps, underscoring the strong influence of global yield dynamics on Australian bond markets.
  • However, the local economic outlook may soon play a larger role, with the release of Q3 CPI data next Wednesday likely to provide fresh insights and potentially shift market expectations once again. 

 

Keep reading...Show less