Australia’s 10-year government bond yield hovered around 4.8%, holding near multi‑month lows after the Reserve Bank of Australia left interest rates unchanged for the first time this year. In a unanimous decision, the central bank kept the cash rate at 4.35%, noting early evidence that the three rate hikes implemented earlier in the year are starting to work their way through the economy.
Policymakers reiterated that inflation remains elevated, but a recent run of softer economic data has given the RBA space to pause and evaluate the impact of previous tightening moves. Markets now turn their attention to Governor Michele Bullock’s press conference later today for signals on whether officials favor an extended pause or intend to preserve a tightening bias.
Three of Australia’s four largest banks expect the RBA to hold rates steady through the end of 2026, with some projecting rate cuts in 2027. Meanwhile, global inflation pressures eased as oil prices dropped sharply following a tentative US‑Iran peace agreement that could allow for the reopening of the Strait of Hormuz.
