FX.co ★ Australia 10Y Yield Rises Above 5%

Australia’s 10-year government bond yield has climbed above 5%, a three-week high, driven by rising US Treasury yields and improving domestic economic sentiment. Consumer confidence in Australia strengthened in August to its highest level in nine months, reinforcing expectations that the economy remains resilient after the Reserve Bank of Australia left its cash rate unchanged at 4.35%, following three increases earlier this year.

Market attention now turns to Thursday’s labour market data. Employment is expected to rise by 15,000 in July, following a robust gain of 76,300 in June, while the unemployment rate is forecast to stay at 4.4%. Investors are also watching Wednesday’s release of quarterly wage figures, as well as a speech by RBA Deputy Governor Andrew Hauser.

On the supply side, the government is issuing a new bond maturing in 2038, which is anticipated to draw strong investor interest. In the corporate market, Alphabet is preparing its first Australian bond sale, which could become the country’s largest-ever corporate issuance and further increase supply in the local debt market.