Australia 10Y Bond Yield Hits 4-week Low

Australia’s 10-year government bond yield rose above 4.9%, attempting to recover from a six-week low as fresh US strikes on Iran dampened hopes for a peace deal, while markets awaited key domestic inflation data. April CPI due this week is expected to show consumer prices rising 0.6% month-on-month, with annual inflation easing slightly to 4.4% from 4.6%, largely due to a government fuel tax break. However, the RBA’s preferred trimmed mean measure is forecast to accelerate to 3.4% annually from 3.3%, reflecting rising transport and logistics costs across a broad range of industries. A stronger inflation reading could strengthen the case for further policy tightening, although markets currently assign only a 10–12% chance of a 25-bp rate hike in June, while the odds of an August increase stand near 50%. Elsewhere, oil prices advanced after reports of fresh military strikes in Iran clouded prospects for an interim agreement between Tehran and Washington to reopen the Strait of Hormuz.

Australia’s 10-year government bond yield fell to around 4.9%, hitting a seven-week low as optimism over a potential US-Iran deal lowered oil prices and tempered inflation concerns. Negotiations have reportedly centered on extending the ceasefire for roughly two months, during which the US would lift its blockade while Iran would allow shipping through Hormuz to resume. However, President Trump warned that the US could go back on the offensive if their discussions fall apart. In Australia, expectations of further monetary tightening by the Reserve Bank weakened after a surprise rise in the jobless rate. The unemployment rate unexpectedly rose to 4.5% in April from 4.3% in March, the highest level in about four and a half years. Markets currently price in a 12% chance of a 25 bp rate hike at the next meeting, with the odds rising to 50% for August and 80% by September. Traders now await key inflation numbers this week for further clues on the policy outlook.

Australia 10 Year Government Bond Yield decreased to 4.89%, the lowest since April 2026. Over the past 4 weeks, Australia 10Y Bond Yield lost 12.00 basis points, and in the last 12 months, it increased 43.60 basis points.