Australia's 10-year government bond yield fell to around 5.1%, an eight-week low, as global bond markets rallied on heightened safe-haven demand following a sharp selloff in technology stocks. Weak earnings from major tech firms reignited doubts about the sustainability of large-scale artificial intelligence investments, fueling a rally in US Treasuries that subsequently spilled over into the Australian bond market. Broader risk aversion was further exacerbated by a suspected hack at Binance, the world’s largest cryptocurrency exchange.
The decline in yields occurred despite expectations of further policy tightening by the Reserve Bank of Australia. Hotter-than-expected inflation data and hawkish remarks from senior RBA officials have led markets to assign an 83% probability to a rate hike at the central bank’s November 3 meeting, up from 25% just a few weeks earlier. The benchmark yield is now on track for its first monthly decline since June, driven by deteriorating sentiment toward AI-related equities and ongoing tensions in the Middle East.
