Australia 10-Year Yield Steady at Near 3-Week High

Australia’s 10-year government bond yield held steady at a near three-week high of 4.33% on Thursday, as investors reassessed the Reserve Bank’s policy outlook following a hotter-than-expected monthly inflation reading. Markets had already seen little chance of a rate cut next week, but have now also trimmed the chance of a November cut to 40% from 70% before the price data. Details in the August CPI report were viewed as signaling upside risks to third-quarter inflation, even though the RBA downplayed the importance of the monthly data, saying the series remained too volatile to rely on. The broader data flow in recent weeks has also been on the slightly strong side, reinforcing the central bank’s cautious stance. Adding to this, Governor Michele Bullock said on Monday that the economy was in “a good place” with both growth and inflation, suggesting there was no urgency to cut rates in the near term.