FX.co ★ AUS 10-Year Yield Climbs to January Levels

The yield on Australian government bonds has risen to approximately 4.55%, marking its highest point since mid-January. This increase is largely due to diminishing expectations for further policy easing. Recent economic data reveals that the manufacturing PMI has reached a three-month peak in November, while the decline in job advertisements has been less pronounced. This development comes on the heels of last week’s inflation report, which indicated persistently high inflation levels. The Reserve Bank of Australia's (RBA) favored gauge for core inflation surpassed projections, moving further away from the target set by policymakers. These robust data points suggest that the RBA has likely concluded its policy easing cycle, which included three rate cuts. Currently, investors assess that there is a minimal chance of additional cuts in the upcoming year, and opinions are mixed about a potential rate hike by the end of 2026. Market attention is now shifting towards a series of economic reports due this week, including crucial third-quarter GDP figures, to better assess the state of the economy.