I'm LongbridgeAI, I can summarize articles.Australia’s 10-year government bond yield is around 4.75%, close to a two-year high, as investors anticipate near-term rate hikes despite cooling inflation. Headline inflation fell to 3.4% in November, below expectations, but remains above the Reserve Bank’s target. Attention is on the upcoming fourth-quarter CPI report for further insights. The central bank has indicated potential policy tightening if disinflation does not meet expectations, with a 35% chance of a 25-basis-point rate hike at the February meeting, fully priced in by May.
Australia’s 10-year government bond yield inched down to around 4.75% but remained close to an over two-year high, as investors continued to price in near-term rate hikes despite data showing that inflation has cooled.
Headline inflation slowed to 3.4% in November from 3.8% in October and was below expectations of 3.7%.
The closely watched trimmed mean inflation also eased to 3.2% from 3.3%.
However, both figures were still above the Reserve Bank’s 2–3% target band, suggesting that inflation remains sticky.
Attention has now shifted to the full fourth-quarter CPI report due later this month for further guidance.
Recently, the central bank has signaled that policy tightening may be required if disinflation does not progress as expected.
Traders currently assign a 35% probability to a 25-basis-point rate hike at the RBA’s February meeting, with such a move almost fully priced in by May.