Australia 10Y Bond Yield Hits 6-week Low

Australia’s 10-year government bond yield fell to below 4.9%, hitting a six-week low as optimism over a potential US-Iran deal lowered oil prices and tempered inflation concerns. The proposed agreement would reopen the Strait of Hormuz, end hostilities, release some frozen Iranian assets, and lay the groundwork for additional negotiations aimed at restricting Tehran’s nuclear program. However, President Donald Trump said the US would keep its blockade of the Strait of Hormuz in place until a formal agreement is finalized. In Australia, expectations of further monetary tightening by the Reserve Bank weakened after a surprise rise in the jobless rate. The unemployment rate unexpectedly rose to 4.5% in April from 4.3% in March, the highest level in about four and a half years. The probability of a rate hike at the next meeting dropped to just 3%, from 13%. Pricing for August pared to 40% from 60%. Markets now await key inflation numbers this week for further clues on the policy outlook.

Australia 10 Year Government Bond Yield decreased to 4.89%, the lowest since April 2026. Over the past 4 weeks, Australia 10Y Bond Yield lost 12.00 basis points, and in the last 12 months, it increased 43.60 basis points.

Australia’s 10-year government bond yield fell to around 4.9% on Friday, extending declines from the previous session and hitting a two-week low, as softer labor market data reduced expectations of further rate hikes. Australia’s seasonally adjusted unemployment rate rose to 4.5% in April 2026, above both March’s reading and market expectations of 4.3%, and marking the highest jobless rate since November 2021. At the same time, employment unexpectedly dropped by 18,600 to 14.74 million, sharply missing forecasts for a 17,500 increase and posting the first monthly decline since November 2025. This led investors to pare back bets on further monetary tightening following the Reserve Bank of Australia’s three consecutive rate hikes. Reinforcing the dovish outlook, preliminary business activity data showed that manufacturing growth slowed, with the PMI easing to 50.3 in May from 51.3 in April, while the services PMI slipped into contraction territory at 47.7 from 50.7 previously.