Australia 10Y Yield Declines

2026-02-26 03:35 By Judith Sib-at 1 min. read

Australia’s 10-year government bond yield fell toward 4.70% on Thursday after a two-day rise, despite growing expectations of further monetary tightening.

Traders are now pricing in an 80% probability of a 25-basis-point rate hike in May, following stronger-than-expected inflation data for January.

The closely watched trimmed mean inflation has remained above the Reserve Bank’s 2-3% target band for seven consecutive months, increasing the risk of a high outcome for the first quarter.

Markets are also factoring in roughly 40 basis points of tightening over the course of the year, although most analysts expect the cash rate to peak at 4.10%, as this is close to levels seen during the post-pandemic inflation surge.

Meanwhile, Governor Michele Bullock has emphasized the need for patience in addressing sticky inflation, noting that balancing price stability with a tight labor market makes policy decisions more challenging.



News Stream
Australia 10Y Yield Declines
Australia’s 10-year government bond yield fell toward 4.70% on Thursday after a two-day rise, despite growing expectations of further monetary tightening. Traders are now pricing in an 80% probability of a 25-basis-point rate hike in May, following stronger-than-expected inflation data for January. The closely watched trimmed mean inflation has remained above the Reserve Bank’s 2-3% target band for seven consecutive months, increasing the risk of a high outcome for the first quarter. Markets are also factoring in roughly 40 basis points of tightening over the course of the year, although most analysts expect the cash rate to peak at 4.10%, as this is close to levels seen during the post-pandemic inflation surge. Meanwhile, Governor Michele Bullock has emphasized the need for patience in addressing sticky inflation, noting that balancing price stability with a tight labor market makes policy decisions more challenging.
2026-02-26
Australia 10Y Yield Rises After Hot Inflation Data
Australia’s 10-year government bond yield rose to around 4.73% on Wednesday, extending its rebound from the previous session, as higher-than-expected inflation data reinforced expectations of further policy tightening. Headline inflation held steady at 3.8% in January, but was slightly above the estimated 3.7%. The closely watched trimmed mean inflation edged up to 3.4%, topping expectations and December’s rate of 3.3%. This also marked the seventh consecutive month that underlying inflation has remained above the Reserve Bank’s 2-3% target range, raising the risk of a strong result for the first quarter. Today’s reading followed strong jobs report and elevated wage growth last week, prompting investors to ramp up bets on more interest rate hikes. Markets now assign roughly an 80% probability to a 25-basis-point increase in May, with a move fully priced in by June.
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