FX.co ★ Australia 10Y Yield Holds Gains

Australia’s 10-year government bond yield held above 4.8%, extending its recent gains and attempting a rebound from a fifteen-week low, as rising global oil prices and caution ahead of key domestic data shaped market sentiment. Traders are now focused on May CPI and labor market figures, which will be critical for the Reserve Bank of Australia’s next policy decision.

After leaving the cash rate unchanged this month, the RBA emphasized that future moves will be guided by incoming data as it evaluates the lagged impact of earlier tightening on the broader economy. Market participants increasingly believe the hiking cycle has effectively ended, with an additional rate increase seen as unlikely unless second-quarter inflation prints markedly above expectations.

On the external front, renewed geopolitical risks helped push oil prices higher. Uncertainty over US-Iran diplomacy intensified after President Trump warned of new strikes should Hezbollah persist in attacks on Israel, while Tehran responded by announcing a renewed closure of the Strait of Hormuz, a key global oil transit route.