Australia’s 10-year government bond yield held around 4.18%, hovering near its lowest level since early May, as investors shifted their focus to the upcoming May monthly CPI indicator. Inflation is expected to ease slightly after holding steady for three consecutive months, further cementing bets on near-term rate cuts following a series of disappointing economic data, including weaker-than-expected GDP figures. Markets are now pricing in an 80% chance of a 25 bps RBA rate cut in July, with a total of 73 bps cuts expected by year-end.
Meanwhile, investors continued to monitor geopolitical developments for its impact on risk sentiment. President Donald Trump announced a ceasefire agreement between Iran and Israel, saying it had begun late Monday, with Iran expected to halt its attacks first, followed by Israel. However, caution persisted after Iran’s foreign minister denied reports of a US-brokered deal, stating that Iran would only stop its attacks if Israel ended its airstrikes.
