FX.co ★ Australia 10-Year Yield Hits 4-Week Low

Australia’s 10-year government bond yield slipped to around 4.72%, its lowest level in four weeks, tracking a recent decline in US Treasury yields amid growing expectations of a more accommodative Federal Reserve. However, further downside was capped by the Reserve Bank of Australia’s recent rate hike and its reaffirmed hawkish stance. Governor Michele Bullock told parliament the central bank is ready to tighten policy again if inflationary pressures persist, calling inflation “with a three in front of it” unacceptable. The RBA continues to project that both headline and core inflation will remain above its target band this year. Her comments echoed those of Deputy Governor Andrew Hauser, who cautioned that inflation is still elevated and remains a significant challenge for policymakers. Markets now look ahead to the RBA’s meeting minutes due on Tuesday for additional insight into the hawkishness of the board, while investors also await Q4 wage data and January labor market figures later this week.