Australia 10Y Yield Holds Near 2-Year Highs

2026-01-28 02:00 By Kyrie Dichosa 1 min. read

Australia’s 10-year government bond yield traded around 4.81%, near a more than two-year high, amid rising expectations of an RBA rate hike following hotter-than-expected CPI data.

Annual inflation rose to 3.8% in December, above the estimated 3.6% and November’s 3.4%, while monthly inflation also exceeded expectations, rising 1.0% from 0.7%.

The quarterly trimmed mean inflation, closely monitored by the RBA, came in at 0.9%, slightly lower than the previous quarter but still above forecasts.

Strong underlying price growth added to the case for a rate hike, with Deputy Governor Andrew Hauser noting that inflation above 3% is “too high.” This coincided with an unexpected drop in unemployment, signaling a stronger-than-expected economy with little spare capacity.

Markets now imply around a 75% probability of a 25 bps rate hike at the February 3 meeting, up from roughly 60% previously.



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