FX.co ★ Australia 10-Year Yield Rises to 2-Week High

Australia's yield on 10-year government bonds climbed to approximately 4.31%, marking a two-week peak following Prime Minister Anthony Albanese's re-election for a second three-year term. Albanese has promised to run a "disciplined" government, prioritizing the reduction of living costs, managing global trade tensions, and upholding commitments to renewable energy, tax reductions, housing, and healthcare investments. These initiatives are perceived as potentially increasing inflationary pressures, thereby possibly constraining the Reserve Bank's capacity to lower interest rates. In parallel, the Melbourne Institute's Monthly Inflation Gauge increased by 0.6% in April, down from March's 0.7%, yet still representing a second consecutive rise. Investors are keenly anticipating the Reserve Bank of Australia's policy meeting in May, with a 25 basis point rate reduction to 3.85% broadly anticipated. Markets predict an additional reduction to 2.85% by the year's end, amid diminishing inflation and subdued global economic growth prospects.