Australia: 10Y Yield Remains Above 5%.

Australia’s 10-year government bond yield remained above 5%, trading sideways near multi-week highs as markets weighed the RBA’s August meeting minutes. While the Board judged the current cash rate was sufficiently restrictive to bring inflation back to target within a reasonable timeframe, several members saw a meaningful risk that inflation could prove more persistent than expected. The RBA held rates at 4.35% for a second straight meeting two weeks ago after three hikes earlier this year, but policymakers warned of further tightening if inflation risks materialize. Still, weak jobs data has reduced expectations for an immediate hike, with markets pricing only a 13% chance of a September increase, while seeing around a 67% probability of a hike by February 2027. Investors now await monthly inflation data on Wednesday, with headline inflation expected to ease to 3.2% from 3.8% despite a 0.8% monthly rise, while the trimmed mean is forecast to edge down to 3.5% from 3.6%.