Australia 10Y Yield Drops Amid Lower-than-Expected Inflation Figures

Australia's 10-year government bond yield eased from its highest level in over a decade as inflation figures came in lower than expected. The monthly consumer price index (CPI) rose 0.4%, below the forecasted 0.5%, while the annual pace accelerated to 4%.

The trimmed-mean measure of core inflation rose 0.2% month-over-month, also below the forecast, but annual core inflation held at 3.6%. This led traders to cut their odds of another rate hike in November, now seen as less likely at 20%, down from 36% before the data.

The central bank's decision to lift rates to a 15-year high of 4.60% in September was driven by annual core inflation remaining above the RBA's target band of 2-3%. However, rising inflation risks from elevated oil prices and the Federal Reserve's tightening outlook kept global yields higher.