Australian 3-Year Bond Yield

The Australian bond market has fallen (rates higher) as would be expected when interest rate hikes are suddenly being priced in. However, with the 3s now trading well above the RBA cash rate we feel they’re around the correct level, pending future data, which should help the local growth stocks find a low.

• Recent inflation prints “moved the goal posts” for the RBA but after their re-rating, we now anticipate rotation around 4%, with yields now already 0.5% above the RBA Cash Rate.