FX.co ★ Australia 10-Year Yield Steady After RBA Minutes

Australia's 10-year government bond yield remained steady at approximately 4.31% as investors evaluated the recent minutes from the Reserve Bank of Australia's (RBA) meeting. The minutes disclosed that the RBA had deliberated a substantial 50-basis point rate cut to safeguard against a slowdown in global growth amid escalating uncertainty in trade policies. Nonetheless, the board resolved to implement a modest 25-basis point reduction, lowering the rate to 3.85%. This decision was influenced by the ongoing robustness of the domestic economy, a strong labor market, and the minimal ripple effect of U.S. trade policies on Australia to date. Policymakers cautioned that should negative risks become apparent, interest rates might dip below the neutral stance of around 3%. Presently, markets predict a 70% probability of an additional rate reduction in July. Investors now look forward to awaiting this week’s GDP data, which is anticipated to provide further insights into the economic landscape. The RBA has underscored that future policy determinations will be guided by forthcoming economic data.