Australia 10-Year Yield Near 4-Week Low

Australia’s 10-year government bond yield held around 4.21%, near a four-week low, as attention shifts to the Reserve Bank of Australia’s policy decision next week. Markets are increasingly pricing in a 25 basis point rate cut at the August 12 meeting, which would bring the cash rate down to 3.6%. Expectations for easing have strengthened after core inflation slowed to 2.7% in June—well within the RBA’s 2–3% target range. Additional pressure comes from signs of a softening labor market, including rising unemployment and subdued wage growth, with traders assigning nearly a 95% chance of a rate cut. Supporting this view, ANZ-Indeed Australian Job Ads fell 1.0% in July, the steepest drop since February, marking continued signs of a gradual labor market slowdown. However, in a sign of underlying economic resilience, private sector activity picked up in July. The Composite PMI rose to 53.8, the fastest pace since April 2022, while the Services PMI reached 54.1, the highest since March 2024.