What’s next for an $A market that has come of age?

The Australian-dollar bond market has come of age, according to ANZ experts, but what happens next will be critical to ensure it stands out in an increasingly competitive global environment.

After record issuance in calendar 2025, data from ANZ and Bloomberg suggest the $A market has seen a fast start to the current year, outpacing the first months of 2026 by more than 25 per cent as issuers and investors alike seek alternatives to traditional markets.

Those kinds of numbers are a long way from the US dollar and euro markets, but position Australia in close competition with the sterling and Canadian dollar markets. Holding that spot won’t be easy though, according to Jocelyn Wong, an Executive Director, Debt Syndicate at ANZ.

"I think there is still a lot more progress that needs to be made in the Aussie market to really substantiate itself as the core third market," she told ANZ Institutional Insights.

"I think we've done very well in the last 24 months. But the question is, where do we go from here? Does the dynamic of the market continue to evolve and mature?"

The growing diversity of the local market, which makes it attractive for participants with a wide range of needs, is a key advantage. That allows for "issuance in different sectors, issuance in different ratings, issuance at various tenor points, and issuance in various capital stacks", Wong said, and will need to be maintained.

"That’s going to be the key thing of making this a very reliable, consistent international market," she said.

Very favourable

ANZ’s Head of Capital Markets Jimmy Choi told Insights much of the activity in the record-breaking start to 2026 had been "driven by the FI [financial institution] space", but other areas are also up significantly year on year.

"The market has been very favourable from the beginning from an investor appetite perspective,” he said. “And we're seeing that across the board from senior to hybrid issuance, to long- and short-tenor."

He said the level of activity showed Australia was "really becoming a market of choice outside those primary markets of $US and euro".

"The Aussie market has really come of age," he said.

The drivers behind the change are broad, according to Wong, with no single driver locally or globally — ongoing de-dollarisation, myriad shifting geopolitical pressures, changing supply chains, to name a few.

"Obviously, from a broader kind of macro perspective, particularly in the last 24 months, a lot has happened," she said. "The rise of new technologies, shifting funding requirements. The market has, from a structural point of view in the last few years, changed a lot."

Choi says an underappreciated factor has been the number of foreign issuers coming to the Australian market for the first time.  

"It's not just domestic participants staying onshore now, because they don't have to go in the $US or euro market as much," he said. "If you look at just the number of foreign issuers coming, it really shows the maturity in the market right now."

Consistency

Wong says the key change in the Australian market has been consistency – being able to provide issuers confidence around execution and diversification in a way the market had not allowed until now.

"From issuer standpoint, access to our market has never really been that consistent," she said.

The truth is, even with the scale of today’s market, Asian and US issuers "don't really need" Australian issuance, Wong explained. The value the $A market is around additional funding, and diversification.

"I do think previously achieving that has been quite challenging," Wong said. "We have not been consistent, across the issuer base.

"I think now you see consistency of that coming through. And I think that's been clearly demonstrated in some of the transactions we’re seeing."

The Australian market’s newfound strength is of course not guaranteed. Both Wong and Choi agree a shifting rate environment and the prospects of global policy shocks are risks, even if the possibility of severe impact is low.

How those, and other factors, impact the market’s evolution will be critical, according to Wong.

"We've seen a lot of change in the last 12 months," she said. "But it’s important — quite important — to ensure that level of confidence and reliability, and various access points, continues.

"I think that is going to be the key thing for us in the next 12 to 24 months, if the Australian market really wants to prove itself as an international market."