08.12.202503:22:26UTC+00AUS 10-Yr Yield Ticks Up as Traders Eye RBA Decision

Australia's government bond yield has risen to 4.71%, reaching its highest point since November 2023, as traders prepare for the Reserve Bank's policy announcement this week and potentially hawkish guidance. Markets broadly anticipate that the RBA will maintain the cash rate at 3.6% during its final meeting of the year. A series of robust data concerning inflation, economic growth, and household spending has led investors to discard any thoughts of further monetary easing, instead betting on a rate increase as soon as May. The focus will now shift to the country's labor market report, set to be released on Thursday, which may offer additional insights into the economy's strength. Concurrently, the US Federal Reserve is expected to lower interest rates at its meeting this week. The yield spread over US Treasuries has significantly widened to about 60 basis points, up from just 17 basis points last month, marking the largest premium since August 2022.