Australia 10-Year Yield Eases

Australia’s 10-year government bond yield dropped to 4.29% on Wednesday, retreating from an over two-week high hit in the prior session as investors continued to assess the Reserve Bank’s policy outlook. Last week, the central bank cut the cash rate by 25bps to 3.60% as expected but stayed cautious on the outlook, leaving markets to anticipate a three-month pause before any further easing. This view was supported by an upbeat July jobs report, which eased concerns about a downturn in the country’s labour market and reduced pressure on the RBA to deliver another cut next month. Investors currently expect the central bank to resume easing with a larger 50bps reduction, likely in November. On the global front, traders look ahead to Federal Reserve Chair Jerome Powell’s speech at the Jackson Hole Symposium for further clues on US policy, as well as to a potential Russia-Ukraine meeting that could influence risk sentiment.