FX.co ★ Australia 10-Year Yield Inches Down Ahead of CPI Data

Australia's 10-year government bond yield has declined to approximately 4.34% as investors keenly anticipate the upcoming release of second-quarter inflation data later this week. This data is expected to shed light on the Reserve Bank's future rate cut decisions. The figures will be pivotal in determining whether inflation is returning to the RBA's target range of 2–3%, a crucial factor for policy relaxation. Last week, Governor Michele Bullock emphasized that a "measured and gradual" policy strategy is still suitable, particularly with the apparent easing of global risks such as trade tensions. Nevertheless, the market is forecasting an 85% likelihood of a 25 basis points rate cut at the central bank's forthcoming meeting in August. In recent trade developments, the US and EU reached a framework agreement on Sunday, which boosts prospects for additional agreements before the August 1 deadline.