Australia’s 10-year government bond yield hovered around 4.46%, holding a six-month high, after RBA minutes signalled a cautious policy outlook. Policymakers said rate cuts would be considered only if the labour market materially weakens and noted that while current settings remain “a little restrictive,” this may no longer be the case, limiting the scope for further easing. Members said part of the recent inflation rise is temporary, but warned that tighter spare capacity could be creating more persistent pressures, consistent with underlying inflation reaching the top of the target band. They also highlighted a still-tight labour market, with unemployment expected to remain steady following resilient October jobs data. The board added that the 75 bps of cuts since February have yet to lift growth, with a more noticeable impact expected from late 2025. Markets are not currently pricing in any rate cuts in 2026.
