Australia’s 10-year government bond yield held steady at 4.66% on Thursday, near its lowest level in over a month, as investors continued to evaluate the Reserve Bank of Australia’s policy outlook. Data released earlier this week showed that household spending remained strong in November, suggesting stronger retail volumes in the fourth quarter and firmer economic growth, which could reinforce the case for policy tightening. This comes amid a slowdown in November inflation, although RBA Deputy Governor Andrew Hauser said most of the figures were largely in line with the central bank’s expectations. Market pricing implies a 27% chance of a rate hike in February, rising to around 76% by May. Investors now look ahead to the December jobs report next week and the full fourth-quarter inflation data later this month for clearer guidance on the RBA’s next move.
