Australian 3-Year Bond Yield

The Australian bond market is likely to sit in limbo until we see future inflation reads which recently have been too hot for the RBA, making credit markets start to consider rate hikes through 2026. Michele Bullock & Co. at the RBA have played this well, had they bowed to pressure  to cut rates further this year they would be facing some tough decisions today, at least they now have some breathing space to asses future data.

• We believe recent inflation prints “moved the goal posts” for the RBA with rotation by the 3s between 3.5% and 4% now feeling likely.