Australia 10Y Bond Yield Hits 4-week Low

Australia 10 Year Government Bond Yield decreased to 4.89%, the lowest since March 2026. Over the past 4 weeks, Australia 10Y Bond Yield lost 6.30 basis points, and in the last 12 months, it increased 53.00 basis points.

Australia’s 10-year government bond yield fell to below 4.9%, retreating from multi-year highs to hit a four-week low as inflation concerns eased after US President Trump agreed to a two-week ceasefire with Iran. Less than two hours before a deadline for Iran to reach a deal or face intensified attacks, Trump announced a “double-sided ceasefire” linked to Iran’s agreement to reopen the Strait of Hormuz. He also said the US had received a 10-point Iranian proposal that provides a workable basis for negotiations, with the two-week window intended to finalize a broader settlement. The ceasefire could soften expectations for further tightening by the RBA, as easing oil prices may reduce near-term inflation pressure linked to earlier supply disruptions. Markets had been pricing a rate hike toward 4.35% or higher at the May meeting, partly due to elevated energy prices. Still, analysts warned that supply conditions could take months to fully normalize even if a lasting agreement is reached.

Australia’s 10-year government bond yield hovered around 5%, trading in a sideways range near multi-decade highs as investors continued to monitor developments in the Middle East war. US President Trump issued an ultimatum for Iran to reopen the Strait of Hormuz, warning of strikes on bridges and power infrastructure if Tehran failed to comply, while Iran rejected the demand and a mediated ceasefire proposal, keeping geopolitical risk elevated. Domestically, momentum weakened, with services PMI posting its sharpest drop since November 2023 and the composite index slipping into contraction in March for the first time in around 18 months. However, earlier data showed resilience, with household consumption rising in February and job vacancies up 2.7% over three months to February, signaling a still-tight labour market. Household spending, which makes up more than half of GDP, remains central to the Reserve Bank's policy. Markets now price a two-in-three chance of a rate hike in May.