Australia’s 3-year bond yield drops below RBA cash rate first time since 2016

Reuters is out with the latest headlines, citing that Australia’s 3-year government bond yield dropped below the Reserve Bank of Australia’s (RBA) official cash rate (1.50%) for the first time since 2016.

The cash rate at the start of 2016 was 2%, was slashed by 25bps in May and August of that year. Since then the RBA has stayed pat on its cash rate at a record low, with markets now pricing in a rate cut in the coming months amid weakening fundamentals and trade uncertainty.