Summary:
Australian interest rates rose across the curve over the past week and month, reflecting mounting inflation pressures and shifting expectations for RBA policy.
Short-term funding rates saw notable upward moves: the 3-month rate increased 3 bps for the week and 17 bps over the month, while the 6-month tenor surged 9 bps in a week and 28 bps in a month, signalling tighter conditions and reduced prospects of early-2026 rate cuts.
Across the government bond curve, yields climbed steadily. The 1-year rate rose 7 bps for the week and 29 bps for the month, while the 3-year jumped 10 bps weekly and 40 bps monthly, highlighting increased repricing around medium-term inflation risks. Longer maturities also edged higher, with the 10-year up 5 bps for the week and 37 bps over the month, and the 15-year up 3 bps and 35 bps respectively.
Overall, the curve steepened modestly, pointing to persistent inflation concerns and expectations that policy rates may remain elevated for longer.
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Bank Bill Swap Rates
TERM TO MATURITY CLOSING RATE Δ WEEK Δ MONTH 1 month 3.55 0 0.11 3 months 3.67 0.03 0.17 6 months 3.96 0.09 0.28 SWAP RATES
TERM TO MATURITY CLOSING RATE Δ WEEK Δ MONTH 1 year 3.69 0.07 0.29 3 years 3.84 0.1 0.4 5 years 4.23 0.09 0.4 10 years 4.57 0.05 0.37 15 years 4.76 0.03 0.35 - Exhibit 1: Australian 3Y/10Y Bond Yield
- Swap-to-bond spread trends for 3-year, 5-year, and 10-year maturities, January 2020 to November 2025, with details on periods of volatility and trend toward zero