FX.co ★ Australia 10-Year Yield Steady Near 7-Week Low

Australia's 10-year government bond yield remains steady at approximately 4.18%, maintaining levels last observed in early May. Investors are notably attuned to the forthcoming Consumer Price Index (CPI) indicator for May, anticipating a slight easing in inflation after it plateaued for three months. This anticipation strengthens expectations for imminent rate cuts, particularly underpinned by a slew of lackluster economic indicators, such as GDP performance falling short of forecasts. Market sentiment reflects an 80% probability of a 25 basis point rate reduction by the Reserve Bank of Australia (RBA) in July, with an overall expectation of 73 basis points’ worth of cuts by the end of the year. Concurrently, investors are keeping a vigilant eye on geopolitical dynamics and their potential effects on market risk. In a recent development, President Donald Trump announced a ceasefire arrangement between Iran and Israel, stating its commencement on Monday night, with Iran slated to cease its attacks first, followed by Israel. Nonetheless, skepticism remains as Iran's foreign minister dismissed claims of a U.S.-facilitated negotiation, clarifying that Iranian aggression would only cease if Israel halted its airstrikes.