FX.co ★ Australia 10-Year Yield Steady Ahead of RBA Decision

Australia's 10-year government bond yield remains steady at approximately 4.19%, nearing a two-week peak, as investors anticipate the upcoming decision by the Reserve Bank of Australia (RBA) regarding interest rates. The market has nearly fully integrated expectations of a 25-basis-point reduction on Tuesday, which, if enacted, would represent the RBA’s third rate cut of the year, thereby decreasing the official cash rate to 3.6%. This decision comes as a response to easing inflationary pressures and a slowing domestic economy. However, recent indications of labor market resilience are challenging these dovish expectations. Notably, Australian job advertisements increased by 1.8% month-over-month in June, a recovery from a downwardly revised 0.6% decline in May, marking the first rise since March. This data underscores the ongoing strength of the labor market, as unemployment remains at a historically low 4.1%. Nevertheless, the RBA predicts a potential uptick in the unemployment rate due to escalating risks from US tariffs, which pose a threat to global trade.