FX.co ★ Australia 10-Year Yield Hits Over 2-Year High

Australia's 10-year government bond yield has climbed to approximately 4.81%, marking its highest point since November 2023, driven by expectations of interest rate hikes from the Reserve Bank of Australia (RBA). Currently, investors assign a 39% probability that the RBA may opt to tighten monetary policy as soon as February, with all eyes now on the upcoming inflation data due later this week. The consumer price figures for November are anticipated to indicate a slight decrease in headline inflation, moving to 3.7% from the previous 3.8%. Likewise, core inflation, as assessed by the trimmed mean, is predicted to dip to 3.2%, yet would remain above the RBA's target range of 2% to 3%. Nonetheless, some economists caution that core inflation might remain unchanged in November, heightening the chances of a robust fourth-quarter inflation outcome. This perspective is somewhat mirrored in the minutes from the RBA's latest meeting, which underscored growing concerns about the persistence of inflationary pressures.