Australia’s 10-year government bond yield rose above 5.4%, near its highest level since mid-2011, tracking elevated US Treasury yields amid persistent energy-driven inflation concerns. The 10- and 30-year US Treasury yields traded near levels not seen since 2002 as oil prices remain elevated, raising inflationary risks and expectations for tighter monetary policy. In Australia, markets reduced the odds of another interest rate increase by the Reserve Bank in November to 20% from 36% previously after August inflation came in slightly below forecasts. The next hike is also now seen more likely in March rather than February. However, core inflation remained above the RBA’s 2–3% target band, a key factor behind the central bank’s decision to lift rates to a 15-year high of 4.60% in September. Australia’s weak trade data also weighed on risk sentiment as the trade surplus narrowed to its smallest in three months.