FX.co ★ Australia 10-Year Bond Yield Falls

Australia's 10-year government bond yield has declined to approximately 4.41%, as investors anticipate insights from the Reserve Bank of Australia's upcoming meeting minutes and labor market data. These are expected to provide further indications on the direction of monetary policy. While the central bank opted to maintain current rates this month, it has adopted a softer position on potential future reductions, attributing this to a decrease in core inflation levels. Concerns over escalating tariffs and growing US-China tensions are increasing pressure on Australia's export-dependent economy, given China's position as Australia’s primary trading partner. This has heightened expectations for a more accommodative monetary policy. However, RBA Governor Michele Bullock recently emphasized that it remains premature to assess the trade conflict's effect on interest rates, dismissing the likelihood of a dual rate cut in May. Nonetheless, markets are fully anticipating a 25 basis point reduction next month, with some even considering the possibility of a half-point adjustment.