FX.co ★ Australia 10-Year Yield Rises Ahead of Jobs Data

Australia's 10-year government bond yield has climbed to approximately 4.24%, recovering from a six-week low encountered in the previous trading session. This movement comes as investors adjust their positions in anticipation of significant labor market data scheduled for release this week. Should the employment figures fall short, it would reinforce the anticipated prospect of imminent rate cuts, a sentiment that has been growing due to a succession of lackluster economic data. This includes unexpectedly weak economic growth in the first quarter, sluggish business activity recorded in May, and muted consumer spending patterns despite a rate reduction during the same period. Last week, the likelihood of a 25 basis point rate cut by the Reserve Bank of Australia (RBA) in July was estimated by the markets at nearly 90%, bringing the rate to 3.60%. Concurrently, markets remain attentive to the escalating tensions in the Middle East after an Israeli airstrike last week injected risk aversion into global markets. Over the weekend, Israel and Iran exchanged strikes, with both countries pledging to persist in their retaliatory actions.