Australia 10-Year Yield Holds at 1-Month High
Australia’s 10-year government bond yield held above 5% on Friday, remaining at its highest level in a month as investors weighed expectations of a rate hike next week from the Reserve Bank of Australia. Markets are widely pricing in a 25 bps rate hike on May 5, which would mark a third consecutive increase and lift the cash rate to 4.35%. Expectations are also firming that rates could climb to 4.60% or higher by the end of the year, underscoring persistent concerns about inflation amid the closure of the Strait of Hormuz. Australia’s annual inflation rate accelerated to 4.6% in March, well above the RBA’s 2–3% target and the highest level since the introduction of monthly CPI reporting in 2025. Meanwhile, the manufacturing PMI rose to 51.3 in April 2026, beating both the preliminary estimate of 51 and March’s reading of 49.8. Producer prices for final demand rose 0.4% quarter-on-quarter in Q1 2026, slowing from a revised 0.8% increase in Q4 2025 and below the forecasted 0.9% gain.
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