Australia 10Y Bond Yield Hits 4-week High

Australia’s 10-year government bond yield held above 5% on Friday, remaining at its highest level in a month as investors weighed expectations of a rate hike next week from the Reserve Bank of Australia. Markets are widely pricing in a 25 bps rate hike on May 5, which would mark a third consecutive increase and lift the cash rate to 4.35%. Expectations are also firming that rates could climb to 4.60% or higher by the end of the year, underscoring persistent concerns about inflation amid the closure of the Strait of Hormuz. Australia’s annual inflation rate accelerated to 4.6% in March, well above the RBA’s 2–3% target and the highest level since the introduction of monthly CPI reporting in 2025. Meanwhile, the manufacturing PMI rose to 51.3 in April 2026, beating both the preliminary estimate of 51 and March’s reading of 49.8. Producer prices for final demand rose 0.4% quarter-on-quarter in Q1 2026, slowing from a revised 0.8% increase in Q4 2025 and below the forecasted 0.9% gain.

Australia 10 Year Government Bond Yield increased to 5.08%, the highest since March 2026. Over the past 4 weeks, Australia 10Y Bond Yield gained 1.70 basis points, and in the last 12 months, it increased 97.00 basis points.

Australia’s 10-year government bond yield rose above 5%, hitting a one-month high as a sharp rise in inflation kept expectations of a rate hike next week. Headline inflation jumped to 4.6% annually in March, slightly below forecasts of 4.7%, but remained above the Reserve Bank’s 2–3% target and marked the highest since monthly CPI data began in 2025. The annual trimmed-mean measure held at 3.3%, in line with expectations as higher fuel costs stemming from Middle East supply disruptions added to already elevated price pressures. Markets are pricing in an 80% probability of a 25-basis-point hike in the cash rate to 4.10%, which would return it to post-pandemic highs, with a further increase to 4.60% expected by September. In the US and other G-7 economies, policymakers are likely to hold rates steady this week while monitoring the risk of rising energy costs fueling inflation, as the Strait of Hormuz remained effectively closed amid stalled US–Iran peace talks.