Australian 10Y Yield Stays Near Multi-Year High

2026-03-31 04:04 By Joshua Ferrer 1 min. read

Australia’s 10-year government bond yield fell to below 5% on Tuesday, but remained near its highest since July 2011 as markets weighed the Reserve Bank’s latest minutes.

The central bank signaled uncertainty on the future path for interest rates after two rate hikes this year, due to concerns over the Middle East war.

The board acknowledged the need to balance the material bearing of a longer conflict on both inflation and economic activity.

Markets currently price in a 60% chance of another rate hike in May, with around 65 bps of additional tightening expected this year.

First-quarter inflation data, labour market figures, and monthly consumer spending indicators due in April will be key inputs ahead of the next policy meeting.

Meanwhile, Treasurer Jim Chalmers said the economy is unlikely to contract in the second quarter even as activity slows, contrasting with some economists’ forecasts of a contraction driven by higher rates, rising fuel costs, and weaker consumer confidence.



News Stream
Australian 10Y Yield Stays Near Multi-Year High
Australia’s 10-year government bond yield fell to below 5% on Tuesday, but remained near its highest since July 2011 as markets weighed the Reserve Bank’s latest minutes. The central bank signaled uncertainty on the future path for interest rates after two rate hikes this year, due to concerns over the Middle East war. The board acknowledged the need to balance the material bearing of a longer conflict on both inflation and economic activity. Markets currently price in a 60% chance of another rate hike in May, with around 65 bps of additional tightening expected this year. First-quarter inflation data, labour market figures, and monthly consumer spending indicators due in April will be key inputs ahead of the next policy meeting. Meanwhile, Treasurer Jim Chalmers said the economy is unlikely to contract in the second quarter even as activity slows, contrasting with some economists’ forecasts of a contraction driven by higher rates, rising fuel costs, and weaker consumer confidence.
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Australia’s 10-year government bond yield rose to around 5%, attempting to climb towards more than multi-year high after the RBA flagged inflation threat from a global oil shock as Middle East tensions persisted. The central bank warned that a global supply shock from the war could lift inflation and long-term expectations, particularly amid persistent capacity pressures. Assistant Governor Chris Kent noted that such shocks could weigh on economic growth, limiting the ability of policy to fully offset the impact and instead shifting the focus toward preventing inflation from becoming entrenched. Markets now price a May rate hike at over 70%, up from roughly 60% on Wednesday. Meanwhile, conflicting signals from the US and Iran over potential negotiations kept oil prices elevated. While Washington indicated efforts to advance talks and ease tensions, Tehran pushed back against ceasefire proposals, and increased US troop deployments in the region added to fears of further escalation.
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