Australian Bond Exchange Weekly Update
6th Mar 2026
Key Points
- Australia: The RBA increased cash rates by 0.25% to 3.85% p.a. at its February meeting – the first hike since 2023. January CPI increased by 3.80% p.a., and the Trimmed Mean was 3.4% p.a.
- United States: The Federal Reserve left the federal funds rate unchanged at 3.50%–3.75% p.a. at its January 2026 meeting, signalling a pause in the easing cycle amid mixed economic data and inflation that remains above target. The latest U.S. CPI inflation rate 2.4% (YoY) as of January 2026.
- United Kingdom: The Bank of England held Bank Rate steady at 3.75% p.a. in early February 2026. CPI declined to 3.0% in the 12 months to January 2026, down from 3.4% in December 2025
- Eurozone: The European Central Bank kept its key deposit facility rate unchanged at 2.00% p.a., and recent data show inflation in the euro area slowing to around 1.7% (YoY), down from 2.0% in December.
| Region | Policy Rate | Latest Inflation (YoY) |
|---|---|---|
| Australia | RBA Cash rate 3.85% p.a. | 3.8% p.a. to January 2026 |
| United States | Fed Funds 3.50–3.75% p.a. | 2.4% p.a. to January 2026 |
| United Kingdom | Bank Rate 3.75% p.a. | 3.0% p.a. to January 2026 |
| Eurozone | Deposit facility rate 2.00% p.a. | 1.7% p.a. to January 2026 (flash) |
Market Insights
- A new 6.7% p.a. A$ Credit-Linked Note over SoftBank has been launched-allocations are limited
- RBA Keeps Tightening Bias as Inflation Remains Stubborn
- Energy Markets Surge as Iran War Escalates
- China’s Annual National People’s Congress is set to convene this week
- A new 6.7% p.a. A$ Credit-Linked Note over SoftBank has been launched allocations are limited
RBA Keeps Tightening Bias as Inflation Remains Stubborn
Australia’s central bank governor, Michele Bullock, warned Tuesday that the Reserve Bank’s patient approach to bringing inflation back to target has clear limits, signalling that policymakers remain prepared to act if price pressures prove more persistent than expected. Speaking after the latest policy deliberations, Bullock said the rate-setting board is closely monitoring incoming data on consumer prices, wages, and household demand. While recent figures suggest inflation has eased from its peak, she stressed that it remains above the bank’s target band and that risks to the outlook have not disappeared. Bullock underscored that the board will not hesitate to tighten monetary policy again if necessary, adding that another rate increase could come as soon as the next meeting in two weeks if inflation or inflation expectations show signs of reaccelerating.
Energy Markets Surge as Iran War Escalates
Oil and gas prices have increased sharply on the back of the Iran war escalations. Iran controls the Strait of Hormuz, a crucial maritime artery along its southern border. Commercial ship traffic has slowed to a trickle since Saturday as vessels avoid the corridor amid rising hostilities. This raises major concerns, particularly in countries such as China, India, South Korea, and Japan. China, for example, imports just over half of its seaborne crude oil from the Middle East, with roughly a quarter of that supply coming from Iran. Japan sends more than 90 percent of its oil imports through the strait, while South Korea relies on the Middle East for about 70 percent of its crude imports.
China’s Annual National People’s Congress is set to convene this week
China’s National People’s Congress convenes this week, with roughly 3,000 delegates expected to endorse a new five-year plan focused on technology self-sufficiency, as trade tensions and geopolitical risks remain elevated and domestic headwinds persist. Investors’ immediate focus will be the 2026 growth target. With around two-thirds of provinces already lowering their own goals, many economists expect Beijing to guide toward GDP growth of 4.5 percent to 5 percent, giving policymakers greater flexibility to tackle industrial overcapacity and advance structural reforms. Others argue officials may retain a target of around 5 percent to anchor confidence in the first year of the new plan, effectively treating that level as a floor rather than a ceiling. A key question will be how explicitly policymakers prioritize consumption and housing support relative to their continued emphasis on technology and industrial policy.
Fixed Income Opportunity: SoftBank Group Corp. Credit-Linked Note Now Available
About SoftBank Group Corp.
SoftBank is a Japanese telecommunications, mobile, electricity, and software conglomerate founded in 1981 and listed on the Tokyo Stock Exchange. SoftBank Group is a globally diversified technology and investment conglomerate with a vast portfolio of subsidiaries and strategic holdings. The company is widely recognised for its long-term vision, large-scale capital deployment, and focus on transformative technologies.- Its operations span multiple sectors, including:
- Telecommunications
- Investment Management (Vision Funds, one of the world’s largest technology investment funds)
- Semiconductors
- Internet & Digital Services
- Robotics
This breadth of diversification provides SoftBank with multiple recurring revenue streams and contributes to the group’s long-term stability, key attributes for investors assessing creditworthiness.
Example: How Fixed Income Works
A company issues a debt security with the following terms:
Term: 5 years
Coupon: 6.15% p.a., paid semi-annually
Issue Price: $100
Minimum Investment: $10,000 AUD
Investor Scenario: Semi-Annual Payments
Sarah may choose to receive income every 6 months. She receives $3,075 every 6 months (6.15% × $100,000 / 2). Over 5 years, she also receives $30,750 in total income, plus her $100,000 principal at maturity (subject to no credit event or early redemption).
If she sells before maturity, she may receive more or less than $100,000 depending on market conditions.
Risks
This is an overview of the main risks associated with this investment. Further (and more complete) details of the main risks associated with this security are set out in the PDS.- Capital invested in the Units is at risk: There is no capital protection or guarantee of financial return in respect of your investment in the Units.
- Credit exposure to Reference Entity: The Units will reference the credit of the Reference Entity, therefore the Units include a risk of capital loss in part or in whole, as the result of Credit Event(s) occurring with respect to the Reference Entity.
- Credit Rating: Investors should be aware that credit ratings do not constitute a guarantee of the quality of the Units or the Reference Entity.
- Secondary Offer Period: Investors who purchase Units in the Secondary Offer Period at an Issue Price greater than the Initial Issue Price of $100.00 will receive a lower overall return, as the Final Value and Coupons are calculated with respect to the Initial Issue Price of $100.00 per Unit.
- Performance of the Reference Entity: Historical performance of the Reference Entity should not be taken as an indication of the future performance of the Reference Entity during the Investment Term.
- Value of the Units before the Maturity Date: The Final Value of the Units is calculated by reference to the Reference Entity and its overall credit worthiness between the First Credit Event Occurrence Date to the Scheduled Last Credit Event Occurrence Date. The market value of the Units before the Maturity Date will be determined by many factors and may be less that what you paid for the Units.
- Liquidity risk: You may not be able to realise your investment when you want to. The Issuer Buy-Back facility is at the discretion of the Issuer. Issuer Buy-Back requests are determined in the Issuer’s discretion.
- Early Maturity. The Units may mature early following an Early Maturity Event, including as a result of an Adjustment Event or Market Disruption Event or if a Credit Event or a Compulsory Early Redemption occurs or if your request for an Issuer Buy-Back is accepted.
- Indirect Investment Risk. Compared to a direct investment (including bonds) in the Reference Entity, the investor will not be entitled to receive dividend or other payments (if any) nor have any voting rights for corporate actions to do with the Reference Entity, including if a Credit Event occurs
- Counterparty Risk. Investors are subject to counterparty credit risk with respect to the Issuer and the Hedge Counterparty.
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*Data accurate as at 06.03.2026
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