03.12.202503:20:14UTC+00AUS 10-Year Yield Hits Near 11-Month High

Australia’s government bond yield has risen to 4.64%, marking its highest point since mid-January. This increase is attributed to the Reserve Bank's hawkish stance, which has overshadowed weaker-than-expected GDP figures. The economy grew by 0.4% in the September quarter, below the anticipated 0.7%. On an annual basis, growth was 2.1%, slightly under the market expectation of 2.2%, but a bit above the Reserve Bank of Australia's (RBA) forecast of 2.0%. This GDP report came on the heels of comments from RBA Governor Michele Bullock, who suggested the economy might have already hit its growth potential, indicating the output gap has probably closed. Traders are now anticipating that the RBA will maintain current interest rates for most of the upcoming year, with the likelihood of a rate hike by late 2026 almost evenly divided. In the previous month, the RBA kept the cash rate at 3.6%, expressing caution regarding further easing in light of the robust economy, a still-tight labor market, and persistent inflation.