Summary:
Short-term money market rates softened slightly over the past week. The 1-month BBSW rate declined by 1 basis point to 3.53%, the 3-month rate fell 3 bps to 3.58%, and the 6-month rate eased 1 bp to 3.78%. Over the month, the 1-month rate dropped 3 bps, the 3-month rate remained unchanged, and the 6-month rose 8 bps. This reflects a flattening bias at the short end of the curve, suggesting a modest reduction in near-term funding cost expectations over the next half-year amid stabilising monetary conditions.
Medium- to long-term bond yields rose across all maturities during the week, indicating a shift toward higher long-term rate expectations. The 1-year rate increased 2 bps to 3.48%, the 3-year rose 5 bps to 3.54%, and the 5-year climbed 3 bps to 3.91%. Longer tenors also saw gains, with the 10-year up 5 bps to 4.32% and the 15-year up 4 bps to 4.54%.
On a monthly basis, yields rose between 10–16 bps, led by the 3-year (+16 bps) and 5-year (+15 bps) tenors. The curve remains upward-sloping, suggesting a potentially higher long-term rate environment amid resilient economic conditions.
Bank Bill Swap Rates
TERM TO MATURITY CLOSING RATE Δ WEEK Δ MONTH 1 month 3.53 -0.01 -0.03 3 months 3.58 -0.03 0 6 months 3.78 -0.01 0.08 SWAP RATES
TERM TO MATURITY CLOSING RATE Δ WEEK Δ MONTH 1 year 3.48 0.02 0.11 3 years 3.54 0.05 0.16 5 years 3.91 0.03 0.15 10 years 4.32 0.05 0.12 15 years 4.54 0.04 0.1
Exhibit 1: Australian 3Y/10Y Bond Yield 