FX.co ★ Australia 10Y Yield Trades Below 5.3%

Australia’s 10-year government bond yield traded below 5.3%, struggling to rebound from a recent five-week low as investors awaited clearer signals on the policy outlook. Attention is centered on RBA Deputy Governor Andrew Hauser, who is scheduled to speak this week and may offer guidance on the likelihood of a fifth rate increase this year.

Recently, an RBA official indicated that the labor market may be softening more quickly than expected, though the inflation report due on October 28 remains crucial for shaping the policy path. Core inflation in the third quarter is projected to exceed both the RBA’s 2–3% target band and its own 3.3% forecast. On the same day, Governor Michele Bullock and other RBA officials will appear before lawmakers, providing an opportunity to discuss the latest data in detail.

Money markets now assign roughly a one-in-three probability to a rate hike in November, with the implied likelihood rising to about 56% for December. At the same time, elevated oil prices—driven by ongoing conflicts in the Middle East and Eastern Europe—have intensified inflation concerns and helped push global bond yields higher.