FX.co ★ Australia 10Y Yield Hits Near 3-Week Low

Australia’s 10-year government bond yield fell to around 5.3%, its lowest level in nearly three weeks, mirroring a broader decline in global yields as the recent selloff in government debt eased. Investors also weighed the minutes from the Reserve Bank of Australia’s September meeting. The central bank left the door open to further monetary tightening, warning that several previously identified upside risks to inflation are now materializing.

The RBA flagged rising global costs, heightened tensions in the Middle East, and oil prices remaining above the assumptions in its August forecasts as key inflation risks. Those comments indicate the official cash rate could be increased for a fifth time this year at the November meeting.

Attention now turns to Thursday’s September employment report and the Q3 CPI data due later this month for signals on the RBA’s next move. At the same time, escalating geopolitical tensions in the Middle East and Eastern Europe are helping keep oil prices elevated, adding to inflationary pressures.