FX.co ★ Australia 10-Year Yield Approaches 4-Week Low

Australia’s 10-year government bond yield has eased to approximately 4.21%, approaching a four-week low. This movement reflects market reactions to recent statements by Sarah Hunter, the Assistant Governor of the Reserve Bank of Australia (RBA). Hunter indicated that inflation is drawing nearer to the central bank's target range and maintained that the economic outlook is looking balanced. She emphasized the importance of a forward-looking strategy due to the lag effect of monetary policies. Additionally, she noted an uptick in consumer spending and reiterated the RBA’s commitment to maintaining near-full employment. Recent robust economic data has dampened the anticipation of an immediate interest rate cut, with the market now predicting an 86% likelihood that the policy remains steady this month. Nevertheless, futures suggest around an 80% probability of rate easing come November. In the interim, investors are keenly awaiting the release of the upcoming employment report and further statements from other RBA representatives. Concurrently, global markets are prepared for the US Federal Reserve’s rate decision this week, where a 25 basis point cut is widely anticipated, exerting pressure on global yields.