FX.co ★ Australia 10-Year Yield Nears 3-Week Low

Australia’s 10-year government bond yield declined to approximately 4.15%, nearing its lowest point in three weeks. Investors are closely monitoring pivotal economic data releases this week, which may offer indications on upcoming monetary policy directions. The principal focus is on the annual inflation rate for Australia, anticipated to decrease to 2.2% in the first quarter, down from 2.4% in the final quarter of the previous year, reaching its lowest since the first quarter of 2021. Should the inflation data align with expectations, it could provide the central bank with greater scope for monetary easing. Financial markets are factoring in a potential quarter-point reduction in the Reserve Bank of Australia's (RBA) interest rate in May, prompted by economic uncertainties and global trade concerns. Although RBA Governor Michele Bullock mentioned last month that the board neither debated a rate cut nor made any decisions regarding a May adjustment, the central bank has adopted a more dovish tone by removing previous references that urged caution on additional easing measures.