FX.co ★ Australia 10-Year Yield Steady After Inflation Data

Australia's 10-year government bond yield remained stable at approximately 4.15%, as investors evaluated the recent domestic inflation data. The annual headline inflation rate stood at 2.4% in the first quarter, surpassing the forecast of 2.3%. Core inflation, measured by the Reserve Bank of Australia’s (RBA) preferred trimmed mean, decreased to 2.9% from 3.3% in the prior quarter, aligning with the RBA's target range of 2-3% for the first time since late 2021. This development bolsters the argument for an interest rate cut in the RBA’s upcoming policy session in May, with markets largely anticipating a 25 basis point reduction. Market expectations suggest rates might decline to between 2.85% and 3.10% by the end of the year, as a more dovish sentiment emerges following U.S. President Donald Trump’s announcement of extensive tariffs, which has amplified worries about global economic expansion.