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Interest Rates / Bond Yields

Australian shorter-dated yields edged lower following Powell and Lagarde’s dovish rhetoric. As the saying goes, “Don’t fight the Fed.” In this case, it’s the Fed, ECB, and BOE! If we see a market-friendly US CPI this week, bond yields could easily make fresh 2024 lows.

  • No change; we can see the local 3 testing 3% in 2024/5, with the downside move potentially already underway.
MM remains bearish toward Australian Bond yields in the medium-term
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Australian 3-year Bond Yield

Similar to the Australian bonds, after Jerome Powell’s comments last week, we believe US yields are set to move lower, i.e., “The Fed is not far from the confidence needed to cut rates.”

  • No change; we are targeting a test of 3.5% by the 2s through 2024/5, as they correct the strong advance since mid-2021.
MM is bearish US 2-Year yields medium term
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US 2-year Bond Yield
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