Australia 10-Year Yield Extends Decline

Australia’s 10-year government bond yield fell to 4.26% on Thursday, extending its decline from the prior session as investors weighed the latest domestic data. Australia’s private sector output expanded at the fastest pace since April 2022, with solid growth across both manufacturing and services sectors. Meanwhile, consumer inflation expectations eased to a five-month low of 3.9% in August from 4.7% in July, signaling reduced price pressures. On the policy front, the Reserve Bank of Australia cut the cash rate by 25bps to 3.60% last week but stayed cautious on the outlook, leaving markets to anticipate a three-month pause before any further easing. Traders currently expect the RBA to resume easing with a larger 50bps cut, likely in November. Globally, investors awaited Federal Reserve Chair Jerome Powell’s speech at the Jackson Hole Symposium on Friday for further clues on the US rate path, while also monitoring a potential Russia-Ukraine meeting that could influence risk sentiment.