FX.co ★ Australia’s 10-Year Bond Yields Rise After CPI Data

Australia's 10-year government bond yield experienced an upswing towards 4.31% on Wednesday, breaking a three-day decline, as market participants absorbed the latest inflation figures. Data released on Wednesday revealed that Australia's Consumer Price Index (CPI) increased slightly more than anticipated, recording a 2.4% rise year-over-year in April 2025. This rate, although unchanged from the previous two months, represents the lowest level observed since November 2024. These inflation statistics followed the Reserve Bank of Australia's decision last week to renew its interest rate reduction strategy, implementing a 25 basis point cut down to 3.85%—marking the lowest rate in two years. The RBA highlighted headway in managing inflation but also noted intensifying downside risks to the economic outlook, largely due to increasing trade conflicts among major global economies. In response, markets adjusted to reflect a 65% likelihood of a further rate cut in July, with expectations for a cumulative 75 basis points of easing anticipated by the first quarter of 2026.