AUS 10-Year Yield Falls Ahead of RBA Rate Call

Australia’s 10-year government bond yield fell to around 4.26%, retreating from a one-week high, as attention turned to the interest rate decision this week. The Reserve Bank is widely expected to cut rates by 25bps amid signs of easing inflationary pressures and emerging labor market weakness. The monetary policy decision will come ahead of July’s jobs data, which is expected to show the unemployment rate holding steady at 4.3%, its highest level since November 2021, while employment is forecast to increase by nearly 22 thousand. Although a rate cut is anticipated, Governor Michele Bullock is expected to maintain a cautious stance on the monetary outlook. After the July decision, Bullock stated that the central bank will no longer provide forward guidance, emphasizing that all decisions are made collectively by the board and cannot be predicted in advance. Externally, global yields may face downward pressure as traders ramp up bets on US rate cuts amid growing economic concerns.