Local shorter dated bond yields are set to retreat this morning following the volatility across offshore markets on Friday, although the weekend may have calmed some nerves. However, we continue to believe the inflation data (CPI) due out on the 29th will determine if the RBA cuts rates before Christmas and send the local 3-year yields back down towards their 2025 lows.
- We believe the local 3s can test 3% in 2026, providing an ongoing tailwind for stocks.
MM is cautiously bullish towards the Australian 3s (yields lower), medium/long term
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