Australia 10Y Yield Remains Above 5%

Australia’s 10-year government bond yield remained above 5%, trading near its highest level since late May as higher US Treasury yields kept volatility in global bond markets. US Treasury yields resumed their advance as investors questioned whether the Treasury’s expanded buyback program could provide lasting reprieve from elevated long-term borrowing costs, reinforcing concerns over the widening US fiscal deficit and heavy debt burden. In Australia, softer labor market data failed to fully eliminate expectations for further RBA tightening, with markets pricing a 68% chance of a rate hike to 4.60% by early next year. Meanwhile, strong demand at government debt auctions, highlighted continued investor appetite for local bonds. The government sold A$13 billion of a new 2038 bond at a 5.17% yield, attracting A$61.97 billion in bids, while another A$5.5 billion bond sale also drew orders exceeding A$18 billion.


