Could an RBA rise come sooner?
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Are Australian bond yields rising and could the RBA hike rates sooner?
Aussie bond yields rose a bit yesterday, and with household spending on the rise, should we be prepared for an RBA that's going to raise rates faster than most people have been expecting? Certainly, Japan is preparing for a rate rise with their bond yields hitting multi-year highs. Whilst we await the latest key measure that the Fed uses for inflation tracking, the core PCE. But don't get too excited. This is one from September. A lot has happened since. then it's Friday it's the fifth of December twenty twenty five. It's the morning call from Nav. Good morning. So Japanese government bond yields have risen another four basis points, getting up to one point nine four percent. That is the highest since two thousand and seven.
Ten year treasuries are up three basis points, but Aussie ten years were up six basis points yesterday to four point seven percent, and that's where they are this morning. We've got a small rise in the US dollar. The Aussie dollar is up 0.2% to eight uh sixty-six point two US cents. The euro, the Swiss franc, and the pound all down. Down. US stock's pretty flat, it's fair to say. Industrials are up the most. IT is up about naught point four percent.
What is the current performance of global equity and commodity markets?
Consumer staples down one per cent. Meta is up four percent, basically because Mark Zuckerberg has said that they are going to cut their spending on their metaverse stuff like uh VR headsets and AR glasses and all the stuff that nobody wants to focus more on AI and oil is higher, uh one and a half percent added to WTI. One point one percent for Brent, which is up to sixty three forty a barrel, and here's NAB Sky Masters in Sydney. It's a bit of a bond story today, isn't it? Uh although in particular, uh, we should talk about Japan and to a certain extent Aussie bonds as well. But one point nine four percent for Japanese bonds, I mean that might not be a lot by international standards, but uh you know, the cost of borrowing is going to be an issue there when you've got a government debt over
Yeah, so it is it is um I guess if you're looking at at bond market movements overnight, um not r th not a lot really happened, but uh you know if you're looking at treasuries or or guilts, just a few basis points either either up or down. But you are correct. I mean yesterday we did see some big sort of the or or further sell off in in Aussie Aussie bond market and we can talk about that in a minute. But but then also So yes, J the rise in JG J G B yields continues. Um you know, the the focus is on what the BOJ may do uh at its December meeting, um sort of more more talk around um possibly them them hiking um and that's that's being reflected in yields. So the front end of the the J G B curve is also repricing.
I would note though that this rise in yields um actually has brought investors back into the market and I think you know Japan their thirty year bond sale um yesterday's drew the strongest demand since twenty nineteen. So you you are seeing um investors aren't necessarily shying away from from the move higher in yield. They're actually um basically using that as a buying opportunity. Embracing it.
Yeah, yeah.
How are tech stocks like Meta reacting to the latest market shifts?
So the uh the so the this rise, continued rise in Aussie yields then. I mean, obviously we're not expecting any move from the RBA now at all, anytime soon. But our yields the fact that the yields are now rising and then we've had household spending that was a lot higher than expected uh for Australia in October, uh up one point three percent, up one point seven percent for goods purchases. Uh so is there Uh is there a concern that maybe, you know, uh a rate hike from the RBA might actually be Coming sooner than we thought.
Yeah, look d definitely, Phil. Um, you know, the household spending data yesterday did come in uh stronger than than was um you know, was expected. And it was broad based the the rise and and the the monthly rise was the strongest that you've seen since January two thousand twenty four. And so it's just setting up um Q four to be another another strong um quarter for the consumer. Um And so it's sort of um you know, pointing to that to that resilience in in the Aussie Aussie economy and um you know, I think you are talking to Sally um on the weekend edition.
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Chapters
8 chapters
1
Are Australian bond yields rising and could the RBA hike rates sooner?
0:01–1:06
2
What is the current performance of global equity and commodity markets?
1:06–3:04
3
How are tech stocks like Meta reacting to the latest market shifts?
3:04–5:11
4
Why are Japanese bond yields climbing and what does it mean for investors?
5:11–6:47
5
What caused the recent sell‑off in the Australian bond market?
6:47–8:31
6
Does stronger Australian household spending signal an imminent RBA rate rise?
8:31–9:42
7
How is the market pricing the risk of a hawkish RBA statement next week?
9:42–11:40
8
What do recent US jobless claims and Fed outlook indicate for global rates?
11:40–12:39