Australia’s 10-year government bond yield fell below 5.4%, retreating from its highest level since mid-2011, as August inflation figures undershot forecasts, trimming bets of further policy tightening. The monthly CPI rose 0.4%, below the expected 0.5%, while the annual pace accelerated to 4% from 3.5% in July but remained below the 4.1% forecast. The trimmed-mean measure of core inflation rose 0.2% month-over-month, also below the 0.3% forecast, although annual core inflation held at 3.6% for a third straight month and remained above the RBA’s 2–3% target band, a key factor behind the central bank’s decision to lift rates to a 15-year high of 4.60% in September. The marginal inflation miss led traders to cut the odds of another hike in November to 20% from 36% before the data, while the next increase is now seen more likely in March rather than February. Meanwhile, rising inflation risks from elevated oil prices and the Federal Reserve’s tightening outlook kept global yields higher.