18.11.202503:00:31UTC+00AUS 10-Year Yield Hovers at Six-Month High

Australia's 10-year government bond yield remained stable around 4.46%, maintaining a six-month peak following signals from the Reserve Bank of Australia (RBA) indicating a cautious monetary policy approach. According to the RBA minutes, policymakers suggested that any potential interest rate cuts would only be considered if the labor market shows significant weakening. Although current interest rates are described as "a little restrictive," this stance might soon change, thereby limiting the scope for further monetary easing. The minutes highlighted that a portion of the recent inflation increase is seen as temporary, yet there was a warning that reduced spare capacity could be driving more enduring inflationary pressures, pushing underlying inflation to the upper end of their target range. Additionally, the minutes underscored a continual tightness in the labor market, with unemployment levels expected to hold steady, aligning with robust employment data from October. The board emphasized that the 75 basis points of rate cuts implemented since February have not yet stimulated growth, with a more significant impact anticipated by the latter part of 2025. Current market expectations do not foresee any rate cuts occurring in 2026.