NAB Morning Call RBA & Fed Week
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Dec 7, 2025 Ken Crompton, NAB's markets economist, dives into the shifting landscape of global bond yields and central bank expectations. He discusses the anticipated RBA hold versus a likely Fed rate cut, highlighting the surge in Australian yields. Ken also explores Japan's rising bond yields in light of potential BOJ tightening. He reviews U.S. inflation data and its influence on consumer spending and Fed decisions, while connecting these themes to Canada's unexpected job gains and China's trade dynamics.
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Divergent Central Bank Moves Priced In
- Markets expect the Fed to cut and the RBA to hold, with both offering hawkish warnings about inflation.
- Ken Crompton says much of that hawkish pricing is already reflected in bond yields, especially at the short end.
Sharp Short‑End Repricing In Australia
- Aussie 3‑year yields jumped from ~3.3% to 4.05% since late October, signalling a large repricing towards tighter policy.
- Ken Crompton cautions yields may be getting stretched and further hikes need stronger consumption and labour data.
Use Labour Data To Judge RBA Odds
- Watch domestic labour and consumption data to judge if markets will push pricing further toward RBA hikes.
- Ken Crompton advises that without stronger data, additional yield increases look less likely despite recent repricing.