Australia 10 Yield Hits Fresh 7-week Low
Australia’s 10-year government bond yield fell below 5.2%, hitting a fresh seven-week low as mounting concerns about artificial intelligence spending continued to drive safe-haven demand for bonds. Falling oil prices also helped ease near-term inflationary pressures amid a potential de-escalation of the US-Iran conflict. Investors now braced for Wednesday’s third-quarter CPI report, which could strengthen the case for a fifth interest rate hike this year from the Reserve Bank of Australia. Core inflation is projected to rise by a sharp 1.0% quarter-on-quarter, keeping the annual rate at 3.6%, well above the central bank’s 2%—3% target range. RBA's senior officials are also scheduled to appear before lawmakers as the data is released, putting them in a position to address the inflation outlook and the implications for monetary policy. Markets imply a 66% chance of a quarter-point hike to 4.85% at the November 3 meeting, though the move is widely expected to be the peak of the cycle.
Australia’s 10-year government bond yield fell below 5.2%, hitting a fresh seven-week low as mounting concerns about artificial intelligence spending continued to drive safe-haven demand for bonds. Falling oil prices also helped ease near-term inflationary pressures amid a potential de-escalation of the US-Iran conflict. Investors now braced for Wednesday’s third-quarter CPI report, which could strengthen the case for a fifth interest rate hike this year from the Reserve Bank of Australia. Core inflation is projected to rise by a sharp 1.0% quarter-on-quarter, keeping the annual rate at 3.6%, well above the central bank’s 2%—3% target range.
RBA's senior officials are also scheduled to appear before lawmakers as the data is released, putting them in a position to address the inflation outlook and the implications for monetary policy. Markets imply a 66% chance of a quarter-point hike to 4.85% at the November 3 meeting, though the move is widely expected to be the peak of the cycle.