Australia 10-Year Yield Holds Above 4.3%

Australia’s 10-year government bond yield steadied at 4.31% on Friday, after rising 4 points in the previous session on the back of strong flash PMI data. Australia’s private sector activity expanded at the fastest pace since April 2022, with the composite PMI rising to 54.9 in August (vs 53.8 in July), driven by robust growth in both manufacturing (52.9 vs. 51.3) and services (55.1 vs. 54.1) sectors. On the monetary policy front, the Reserve Bank of Australia slashed its cash rate to 3.60% last week and left the door open to two or more easing if inflation continues to cool in line with forecasts. Markets remain almost fully priced for the central bank to deliver another 25bps rate cut in November. On the global front, all eyes are now on Federal Reserve Chair Jerome Powell’s speech at the Jackson Hole Symposium later today for further clues on the US policy outlook.