Yields Jump on US Fiscal Worries

• US Treasury yields jumped overnight, led by the long end, following a weak $16bn 20-year bond auction. The 10-year yield rose 12bps to 4.60% as soft demand highlighted growing investor unease over US fiscal dynamics.
• Fiscal concerns were further fuelled by House Speaker Johnson’s confirmation of a deal to push forward with Trump-era tax cuts. Economists warned this could worsen the debt outlook and prolong bond market volatility.
• RBA Deputy Governor Hauser speaks today, with markets watching for commentary on China — which accounts for roughly 34% of Australia’s goods exports.
• The latest RBA Statement on Monetary Policy assumes Chinese GDP growth of 4.8% in 2025 and 4.4% in 2026, with downside risks from tariffs and global uncertainty offset by ongoing domestic stimulus in China.