Australia's 10-Year Yield Retreats as Global Oil Prices Ease

Australia's 10-year government bond yield has retreated from its mid-2011 highs, falling below 5.3%. This decline is in line with lower global yields, as concerns over Middle East supply disruptions have eased and oil prices have retreated.

The drop in oil prices comes after Saudi Arabia worked to restore flows through its East-West pipeline, while President Trump is set to meet Gulf leaders next week. In Australia, Governor Michele Bullock said upside inflation risks were materializing and warned that higher costs could make inflation more persistent.

Market expectations now suggest at least two more rate hikes by the February meeting, with a roughly 87% chance of the first occurring on September 29. This marks a notable shift from the start of September, when traders were pricing just one further hike.