FX.co ★ Australia 10-Year Bond Yield Extends Fall

The yield on Australia's 10-year government bond decreased to approximately 4.39% on Monday, continuing the decline from the previous session. This movement is largely influenced by investors eagerly awaiting upcoming domestic economic reports. Key data releases, such as the monthly Consumer Price Index (CPI) indicator due on Wednesday and retail sales figures scheduled for Friday, are anticipated to shed light on inflationary patterns and consumer expenditure—both critical components shaping the Reserve Bank of Australia's (RBA) policy direction. In a move that did not surprise the market last week, the RBA reduced the cash rate by 25 basis points, bringing it down to 3.85%. This was the first rate reduction since January and took the rate to its lowest level in two years. The RBA acknowledged positive advancements in tackling inflation but also expressed caution about increasing downside risks to the economy, citing global trade tensions and prospective US tariffs as concerns. Currently, market predictions peg the likelihood of another rate reduction in July at 65%, with an expected cumulative easing of 75 basis points by the first quarter of 2026.