Australia 10Y Yield Falls Despite RBA Hike

2026-05-05 06:37 By Joshua Ferrer 1 min. read

Australia’s 10-year government bond yield fell below 5%, hitting a one-week low as the Reserve Bank delivered a widely expected 25bp hike to 4.35% while leaving the prospect of further tightening uncertain.

In an eight to one vote, the central bank raised the cash rate for a third consecutive meeting, returning it to levels last seen at the peak of the post-pandemic inflation surge, underscoring its focus on bringing inflation back to the 2–3% target.

The decision marked a more hawkish stance than the split seen in March, though policymakers signaled that monetary policy is now “well placed to respond to developments,” hinting at a possible pause ahead.

Markets now see only a 20% chance of another move in June, while a further increase toward 4.60% by September remains fully priced.

Meanwhile, a jump in oil prices driven by the US-Israeli conflict with Iran led the RBA to sharply raise its inflation forecast to near 5% while lowering its growth and employment outlooks.



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Australia 10Y Yield Falls Despite RBA Hike
Australia’s 10-year government bond yield fell below 5%, hitting a one-week low as the Reserve Bank delivered a widely expected 25bp hike to 4.35% while leaving the prospect of further tightening uncertain. In an eight to one vote, the central bank raised the cash rate for a third consecutive meeting, returning it to levels last seen at the peak of the post-pandemic inflation surge, underscoring its focus on bringing inflation back to the 2–3% target. The decision marked a more hawkish stance than the split seen in March, though policymakers signaled that monetary policy is now “well placed to respond to developments,” hinting at a possible pause ahead. Markets now see only a 20% chance of another move in June, while a further increase toward 4.60% by September remains fully priced. Meanwhile, a jump in oil prices driven by the US-Israeli conflict with Iran led the RBA to sharply raise its inflation forecast to near 5% while lowering its growth and employment outlooks.
2026-05-05
Australia 10-Year Yield Remains Near 5%
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