FX.co ★ AUS 10Y Yield Trades Near Multi-Decade Highs

Australia’s 10-year government bond yield remained above 5%, hovering near its highest level since July 2011, as a global oil shock linked to the prolonged Middle East conflict heightened inflation risks and darkened the economic outlook. Oil prices continued to rise as the conflict in Iran entered its fifth week, with renewed attacks in the region amplifying threats to global energy supplies. In response, Prime Minister Anthony Albanese announced a temporary reduction in fuel taxes to relieve cost pressures, highlighting the broader economic impact. Attention now turns to the release of the Reserve Bank’s March meeting minutes, following a narrow decision to raise rates to 4.1%. Investors are watching closely to see how policymakers weigh persistent inflation against slowing growth, particularly as fuel shortages have emerged in parts of the country. Economists are turning more cautious, with some warning that the economy could contract in the second quarter as higher interest rates and surging energy costs curb consumer spending.