Australis 10Y Yield Nears Fresh 2011 Highs

Australia’s 10-year government bond yield rose above 5%, approaching fresh mutil-decade highs as global inflation risks intensified amid renewed Middle East tensions. The move followed President Donald Trump’s order for a naval blockade of the Strait of Hormuz after failed weekend peace talks with Iran, intensifying fears of a prolonged disruption in global energy supply. The energy shock has reinforced expectations that central banks may delay rate cuts or maintain restrictive policy for longer, keeping global yields elevated. In Australia, the repricing comes amid already sticky inflation and uncertainty around the Reserve Bank’s policy path. Markets currently price in a 65% chance the RBA will hike in May and see rates near 4.65% by year-end. Traders now look to RBA Deputy Governor Hauser’s remarks due later today and labor market data this week for further cues on policy outlook.

Australia’s 10-year government bond yield hovered around 4.9%, trading in a sideways range near multi-decade highs as markets remained on edge amid ongoing developments in the Middle East war. Oil prices continued to rise amid uncertainty over the fragile US–Iran–Israel ceasefire and its implications for energy flows through the Strait of Hormuz. The ceasefire, which includes Iran’s commitment to reopen the key shipping lane, initially eased safe-haven demand and pressured yields lower, but sentiment has turned more cautious as reports indicate neither side has fully committed to the 10-point framework, leaving the truce vulnerable to setbacks. The conflict, now in its second month, has pushed energy prices higher and heightened inflation risks. The Reserve Bank of Australia has already raised rates by 50 basis points to 4.10% amid persistently elevated inflation, and markets are now pricing in further tightening in May, with policy rates seen reaching around 4.65% by year-end.

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.