Markets Rise as Ceasefire Holds

• Risk sentiment has improved as the ceasefire extension with Iran reduced immediate escalation fears, however, a modest lift in bond yields shows that markets are continuing to price lingering energy and inflation risks.
• US dollar and bond yields both edging higher as the war backdrop remained unresolved. The US 2-year yield rose to around 3.80% and the 10-year yield to 4.30%.
• Oil remained the key macro signal, rising to around US$102/bbl as supply risks persisted despite the ceasefire extension. That kept inflation sensitivity in focus and helps explain why rates markets were less relaxed than equities.
• In Australia, the proposed NDIS overhaul was the main domestic development, with the government aiming to slow annual program growth to 2% through to 2030. That implies a materially lower medium-term fiscal cost, with projected annual spending revised to $55bn from $70bn.