Australia 10Y Yield Rises from 7-Week Low
Australia’s 10-year government bond yield rose toward 5.2%, climbing off a recent seven-week low after hotter-than-expected inflation data boosted expectations for a fifth rate hike this year. Monthly CPI rose 0.8% in September, the biggest increase in six months and above the expected 0.7%, while the annual pace jumped to 4.3% from 4.0% in August, also exceeding forecasts of 4.2% and hitting its highest since March. The monthly core inflation rose 0.3%, matching expectations, while the annual rate edged up to 3.6% from 3.5%, also in line with forecasts. The pickup pushed inflation further above the RBA’s 2—3% target range, boosting bets on a hike at the November 3 meeting. The data followed remarks from RBA Governor Michele Bullock earlier on Wednesday, when she warned that upside risks to inflation were materializing and price pressures would likely exceed the central bank’s August forecast. Traders raised the odds of a November hike to 78%, up from 70% before the inflation print.
Australia’s 10-year government bond yield rose toward 5.2%, climbing off a recent seven-week low after hotter-than-expected inflation data boosted expectations for a fifth rate hike this year. Monthly CPI rose 0.8% in September, the biggest increase in six months and above the expected 0.7%, while the annual pace jumped to 4.3% from 4.0% in August, also exceeding forecasts of 4.2% and hitting its highest since March. The monthly core inflation rose 0.3%, matching expectations, while the annual rate edged up to 3.6% from 3.5%, also in line with forecasts.
The pickup pushed inflation further above the RBA’s 2—3% target range, boosting bets on a hike at the November 3 meeting. The data followed remarks from RBA Governor Michele Bullock earlier on Wednesday, when she warned that upside risks to inflation were materializing and price pressures would likely exceed the central bank’s August forecast. Traders raised the odds of a November hike to 78%, up from 70% before the inflation print.