Australia’s 10-year bond yield rose to around 4.35%, reaching its highest level since October 10th, after the RBA held rates steady as expected and cautioned that inflationary pressures remain elevated. The decision was made unanimously by policymakers, who noted that the hotter-than-expected inflation report last week suggests slightly stronger underlying inflation risks than previously thought. Private demand also showed signs of recovery, while the labor market remained somewhat tight and rising house prices added to reasons for caution. Investors have largely abandoned expectations for a near-term rate cut, with markets now assigning only a 10% probability to a December move. A cut to 3.35% is no longer fully priced in, suggesting the RBA’s easing cycle may have already run its course. Yields also tracked higher in line with the US, after Federal Reserve officials signaled caution over further interest rate cuts.
