Australia’s three-year bond sale saw the highest demand since 2018 as investors sought nearly five times the A$1 billion ($692 million) of notes on offer. The bid-to-cover ratio reached its peak level since October 2018, reflecting strong appetite for government debt. The surge followed softer-than-expected jobs data, which led traders to scale back expectations for further Reserve Bank of Australia rate hikes.
Market pricing now implies only a 22% chance of a November rate increase, with no full pricing of a final quarter-point hike early next year. Philip Brown, head of research at FIIG Securities, noted that rising unemployment could accelerate the RBA’s shift from hikes to cuts. He anticipates sustained demand for Australian bonds across the yield curve as monetary policy expectations evolve.
Source: Bloomberg Markets · Summarized by HeadlinesBriefing