Australia’s 10‑year government bond yield remained below 5.4% after retreating from 15‑year highs, mirroring a sharp fall in US Treasury yields. Robust demand at recent US government bond auctions drove Treasury yields lower, providing some respite to global markets after weeks of heavy selling.
Oil prices also declined after President Trump signaled progress in US–Iran talks, easing concerns about a potential escalation in tensions. This reduced fears of renewed energy‑driven inflation and the prospect of interest rates staying higher for longer.
Attention now turns to Australia’s September employment report, due next week, after the unemployment rate unexpectedly rose to 4.6% in August. Any further increase in joblessness would bolster the case against another Reserve Bank of Australia rate hike, following last month’s move that lifted the cash rate to 4.60%.
Futures markets currently price in roughly a 30% probability of a rate increase in November, rising to about 46% in December. Investors will also closely watch the minutes from the RBA’s 13 October meeting and the September‑quarter CPI data, both due later this month.
