Australia 10-Year Yield Steady Ahead of RBA Decision

Australia’s 10-year government bond yield held steady at 4.25% as investors shift their focus to the Reserve Bank’s policy decision next week. The central bank is widely expected to cut its cash rate by 25bps, after opting to hold rates last month in rare dissent. Rate-cut expectations have been reinforced by last month’s weak inflation report, which showed that underlying inflation is gradually moving toward the RBA’s 2.5% target, alongside soft jobs data that revealed the first signs of strain in what had been an unusually resilient labor market. In the latest economic news, Australia’s trade surplus in goods widened sharply in June, beating forecasts, driven mainly a rebound in exports while imports declined. While the data signals some resilience in Australia’s external sector, it had little impact on monetary policy expectations. Meanwhile, in the US, traders are ramping up bets on the Federal Reserve cutting rates this year, amid mounting concerns about the economic outlook.