The comments from Jerome Powell on Friday night were supportive of Australian bonds, ticking yields down towards their 2025 lows. Markets are pricing in one more easing before Christmas and another in 2026 taking yields down towards 3%, nothing unrealistic here in our opinion.
- We can see the local 3’s trading between 3% and 3.5% into Christmas; the lower they move, the more supportive it is for rate-sensitive stocks.
MM is cautiously bullish towards the Australian 3s (yields lower)
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