Australia 10Y Yield Rises Ahead of CPI
Australia’s 10-year government bond yield rose above 4.9%, attempting to recover from a six-week low as fresh US strikes on Iran dampened hopes for a peace deal, while markets awaited key domestic inflation data. April CPI due this week is expected to show consumer prices rising 0.6% month-on-month, with annual inflation easing slightly to 4.4% from 4.6%, largely due to a government fuel tax break. However, the RBA’s preferred trimmed mean measure is forecast to accelerate to 3.4% annually from 3.3%, reflecting rising transport and logistics costs across a broad range of industries. A stronger inflation reading could strengthen the case for further policy tightening, although markets currently assign only a 10–12% chance of a 25-bp rate hike in June, while the odds of an August increase stand near 50%. Elsewhere, oil prices advanced after reports of fresh military strikes in Iran clouded prospects for an interim agreement between Tehran and Washington to reopen the Strait of Hormuz.

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