FX.co ★ Australia 10-Year Bond Yield Rises After Wage Data

Australia's 10-year government bond yield surged beyond 4.5% on Wednesday, marking its highest point in over a month, fueled by wage inflation data that exceeded expectations. Annual wage growth increased to 3.4% in the first quarter, up from 3.2% in the previous quarter, surpassing the anticipated 3.2%. This robust wage growth places additional pressure on the Reserve Bank of Australia ahead of its policy meeting next week, casting doubt on the probability of a substantial 50 basis points rate cut, which some economists had speculated. Nonetheless, investors are still expecting a smaller 25 basis points cut. Domestic yields were also bolstered by an improved risk sentiment, following a temporary pause in the US-China trade war that alleviated concerns about a global recession. Meanwhile, in the United States, softer consumer inflation data strengthened the argument for the Federal Reserve to consider easing.