Yields Fall on Treasury Comments

• With no major data overnight, markets were largely headline-driven. US bond yields eased 3–6bps, led by the longer end, after Treasury Secretary Bessent advised against increasing the average maturity of US government debt
• The US yield curve bull-flattened following those remarks: 2-year yields slipped 3bps, 10-years fell 5bps, and 30-years dropped 6bps. The market now prices in 29bps of Fed rate cuts by September and 68bps by December, reflecting growing confidence in a policy shift.
• In Australia, private sector credit rose by 0.5% in May, following April’s strong 0.7% gain. Annual growth has lifted to 6.9%, with household credit remaining one of the key drivers.
• Today is relatively quiet on the domestic data front. In the US, attention will turn to May’s JOLTS report and June’s ISM Manufacturing data.