Yields Ease as Markets Eye Upcoming RBNZ Cut and FOMC Minutes

• US yields eased, with the 2-year falling from 3.60% to 3.56% and the 10-year from 4.17% to 4.11%. Markets now price a 90% chance of a 25bp Fed cut on 30 October and around four cuts in total for this cycle.
• RBNZ decision in focus — markets have fully priced a 25bp cut today, while economists remain divided, assigning a 45% probability to a 50bp move as recent data undershot forecasts. The cycle implies about 80bp of total easing, taking the OCR to 3.00%.
• Australian bond yields softened, with the 2-year at 3.51% and the 10-year down from 4.43% to 4.37%. Pricing suggests a 40% chance of a 25bp RBA cut on 4 November, with only one further cut expected this cycle.
• Consumer sentiment fell for a second consecutive month, down 3.5% to 92.1, a six-month low, indicating that earlier rate cuts provided only temporary support as inflation concerns resurface.
• Ahead today: the RBA Annual Report, the RBNZ policy decision, and the FOMC September meeting minutes.