FX.co ★ Australia 10-Year Bond Yield Eases Ahead of RBA Decision

Australia's 10-year government bond yield edged closer to 4.18% on Thursday, pulling back slightly from the notable increase witnessed in the previous session. This movement reflects investor strategies ahead of the Reserve Bank's imminent policy announcement. Market consensus anticipates the central bank will reduce its interest rate from 3.85% by 25 basis points next week, influenced by sluggish economic growth and diminishing inflation concerns. Adding to the cautious outlook, Australia's trade surplus for goods fell to its lowest in nearly five years in May due to a decline in exports paired with a rise in imports, indicating softening external demand. This followed a lackluster retail sales report on Wednesday, highlighting weak consumer spending domestically. The market anticipates further rate cuts, potentially reaching a low of 2.85%, which is below most estimates of the neutral rate.