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

Australia's 10-year government bond yield has decreased to approximately 4.27%, nearing its lowest point in three weeks, as global trade tensions have dampened risk appetite. President Trump has declared an increase in US steel tariffs, doubling them to 50% starting June 4, aiming to reduce dependency on China. In turn, China has accused the US of breaching the trade agreement and has promised a strong response. On the domestic front, recent data indicates that Australia's manufacturing sector has experienced a decline for the second consecutive month in May, reaching its lowest level since February. This suggests a potential slowdown in industrial activity. Moreover, last week’s reports revealed an unforeseen drop in retail sales for April, reflecting increasing consumer caution. These developments have solidified expectations of ongoing monetary policy easing by the Reserve Bank of Australia (RBA).