Trade Hopes Improve Sentiment

• Markets found support after U.S. Treasury Secretary Scott Bessent called the U.S.-China trade stance “unsustainable.” Reports of strong progress in U.S.-India talks also helped lift sentiment.
• U.S. 10-year yields dipped 1bp, while European bonds fell 2–3bps. Trading was steady overall, with limited reaction across rates despite the 2-year auction and growth headlines.
• The IMF cut its 2025 global growth forecast to 2.8% (from 3.3%) and the U.S. to 1.8%, warning of a 40% chance of recession. The downgrade supports the case for global policy easing, including in Australia.
• In Australia, markets continue to price in up to four RBA cuts this year, backed by softer global growth signals and contained domestic inflation.