FX.co ★ Australia 10-Year Yield Approaches 2-Week High

Australia's 10-year government bond yield climbed to approximately 4.29% on Monday, approaching a two-week peak as investors assessed remarks from the Reserve Bank of Australia (RBA) that highlighted a cautious approach to reducing interest rates. Governor Michelle Bullock emphasized that the central bank would stay vigilant to changes in the economic outlook, pointing out that recent data have largely met expectations. Although the recent interest rate cuts are expected to bolster household and business expenditure, global economic conditions remain uncertain. The RBA stressed its progress towards achieving its dual goals of price stability and full employment, as inflation is moving towards the midpoint of the 2–3% target range, and the labor market remains close to full employment. Current market sentiment reflects a 75% probability of a rate cut in November, down from a fully anticipated reduction earlier, with swaps indicating fewer than two additional cuts by the middle of next year. Attention now shifts to the forthcoming PMI figures and the monthly Consumer Price Index release for further insights.