Australia’s government bond yield rose to around 4.75%, its highest level since November 2023, after the RBA left its benchmark interest rate unchanged for a third consecutive meeting, signaling that any future policy moves will be guided by incoming data. The decision was unanimous, with policymakers pointing to renewed inflation pressures and a still-tight labor market. Officials added that recent data indicate growing upside risks to inflation, though more time is needed to judge the persistence of those pressures, noting that temporary factors may be driving part of the recent pickup and cautioning against overinterpreting monthly figures. Markets are pricing in only a 12% probability of a rate hike at the RBA’s February 3 meeting, with the odds rising to around 50% by May. Attention now turns to Thursday’s labor market report for further clues on the economy’s underlying momentum.
