Market Insight
Macro in Minutes: Two Experts. One Take.
June 3, 2026
Chief Investment Officer, Charlie Jamieson, and Portfolio Manager, Vijay Murik, examine the key drivers of recent bond market performance and assess the broader macroeconomic outlook amid elevated yields, softening growth and evolving policy expectations.
In their view, bond markets have recently been influenced by movements in oil prices, with strong correlations observed since the onset of the Middle East conflict. Should oil prices ease in line with current futures market expectations, bond yields could retrace toward pre-conflict levels. Notably, bonds have outperformed equities domestically year-to-date, supported by high starting yields and improving valuations.
From a macro-perspective, growth is beginning to soften both globally and domestically. They note weaker domestic employment data, declining housing activity, and softer demand indicators. While the Reserve Bank of Australia (RBA) is still expected to deliver limited additional rate hikes, the tightening cycle is likely nearing its peak, particularly if inflation continues to moderate and labour market conditions weaken.
Looking ahead, fixed income remains attractive given elevated yields although volatility is expected to persist, particularly across duration sensitive assets driven by geopolitical developments.
Key takeaways
- Bond yields remain sensitive to oil prices and geopolitical developments.
- Domestic bonds have outperformed equities year-to-date, reflecting evolving risk sentiment.
- Growth is softening globally and locally, with weaker employment and housing data emerging domestically.
- The RBA is likely nearing the peak of its current tightening cycle, and limited further hikes are expected.
- In JCB's view, fixed income continues to offer attractive investment opportunities, including defensive sources of income, although volatility is likely to persist in the near term.
- Longer-term, weaker growth could lead to policy easing and relatively lower bond yields.
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Jamieson Coote Bonds
Melbourne
Level 23, 101 Collins Street
Melbourne VIC 3000
T: +61 3 8580 0088
