Australian 3-Year Bond Yield

Last month’s surprisingly hot inflation print continues to weigh on credit markets who are “hopeful” of a 0.25% over the next 12-months but far from certain. Similar to the Canadian 2s, the local 3s are now anchored to current cash rate.

• We believe last month’s CPI has “moved the goal posts”  and further rotation by the 3-year yield looks likely around 3.6%.