Australia 10Y Bond Yield Hits 5-week Low

Australia’s 10-year government bond yield fell to around 5.2%, hitting a five-week low after a surprisingly soft jobs report prompted investors to pare back wagers on further rate hikes. The economy shed 39,300 jobs, the biggest monthly fall since February last year, defying expectations for a 20,000 gain. The jobless rate also stayed at a five-year high of 4.7%, above the 4.6% forecast, with the previous month revised up from an initial 4.6% reading. The figures suggested the labor market may be loosening after the Reserve Bank of Australia raised its cash rate by 1 percentage point to 4.60% this year to rein in inflation, one of the most aggressive tightening cycles among developed economies. Markets now see less than a 10% chance of a November hike, down from 35% earlier, while the odds of a December move fell to 30% from 60%. A May 2027 hike carries the highest probability at 80%. Attention now turns to Q3 CPI data due later this month for further clues on the policy outlook.

Australia 10 Year Government Bond Yield decreased to 5.23%, the lowest since September 2026. Over the past 4 weeks, Australia 10Y Bond Yield lost 9.00 basis points, and in the last 12 months, it increased 110.10 basis points.

Australia’s 10-year government bond yield fell to around 5.3%, hitting its lowest level in three weeks, tracking a broader retreat in global yields as the recent selloff in government debt lost momentum. Investors also assessed minutes from the Reserve Bank of Australia’s September meeting. The central bank has left the door open to further monetary tightening, warning that several upside risks to inflation identified earlier were materializing. The RBA highlighted rising global costs, escalating Middle East tensions and oil prices above levels assumed in its August forecasts as key inflation risks. The comments suggest the official cash rate could be raised a fifth time this year in November. Focus now turns to September employment report due Thursday and the Q3 CPI data expected later this month for clues on the RBA's next move. Meanwhile, escalating geopolitical tensions in the Middle East and Eastern Europe continued to support elevated oil prices, adding to inflationary pressures.