FX.co ★ Australia 10-Year Bond Yield Rises

Australia’s 10-year government bond yield climbed to around 4.74%, rebounding after briefly touching a three-month low in the previous session, as expectations firmed that the RBA is moving closer to a potential rate hike in March. The shift followed comments from Governor Michele Bullock, who stressed that the board’s March meeting remains “live” for a possible increase and rejected the view that policymakers would wait for Q1 inflation data—due in late April—before deciding on a move in May. Markets are now assigning roughly a 28% probability to a rate rise at the upcoming meeting, while fully pricing in an increase by May. Investors are also awaiting Q4 GDP figures due this week for further guidance. At the same time, markets are tracking the intensifying conflict in the Middle East, as investors weigh the risk that higher oil prices could fuel renewed inflationary pressures, while elevated geopolitical tensions erode risk appetite and bolster demand for safe-haven assets.