Australia’s 10-year government bond yield edged up to 4.67% but remained close to an over one-month low, as investors reassessed the Reserve Bank’s interest-rate outlook. Softer-than-expected inflation data for November boosted the case for the RBA to hold rates steady in the near-term. However, RBA Deputy Governor Andrew Hauser said on Thursday that most of the figures were broadly in line with the central bank’s expectations, adding that the quarterly underlying inflation measure is likely to come in “just a tiny bit” above the 3.2% recorded in November. Markets are now focused on the full fourth-quarter inflation report, due later this month, which will likely have a more significant impact on the RBA’s next policy decision. Traders are currently pricing in a 24% chance of a rate hike in February, with roughly 30 bps of tightening expected through 2026, equivalent to just over one rate increase.
