Australia’s 10-year government bond yield eased to around 4.94%, but remained close to its highest level since July 2011, after the Reserve Bank of Australia (RBA) delivered back-to-back interest rate hikes. The board lifted the cash rate to 4.1% from 3.85%, marking its first consecutive increase since mid-2023 and partially unwinding two of the three cuts implemented last year.
The move underscores the central bank’s intensified campaign against stubborn inflation, with rising energy costs linked to the escalating conflict involving Iran adding to price pressures. It also follows a renewed pickup in inflation, driven primarily by services and housing, against the backdrop of a still-tight labor market.
Investors are now focused on Governor Michele Bullock’s post-meeting press conference for clues about the RBA’s next policy steps. Market participants are also watching February labor market data, due this week, for further guidance on the central bank’s policy outlook.
