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Westpac note that the 3-/10-Year yield curve "does tend to peak before the first rate hike, and, while the curve might have a further bear steepening impulse once the tightening cycle is underway, the broader trend is always towards flatter curves. That is perhaps "yield curve 101", but the really interesting aspect of current curve shape is that it appears the pre-emptive curve steepening will have peaked well before the first RBA hike. In addition, current market pricing suggests that the RBA will not need to move to a restrictive policy stance, but rather remove policy accommodation in this cycle. That suggests the curve should stay steeper for longer than it has previously, supported by the 10-Year bond yield staying above the cash rate. The limiting factor, of course, is that the curve remains near the upper end of historical ranges, so that suggests any near-term bear steepening should be well contained, with the curve well priced for inflation expectations."