Australia 10-Year Yield Heads Toward 5% as RBA Tightening Looms

Australian 10-year yields may rise above 5% in coming months — at least fleetingly — as the country’s interest-rate trajectory gets repriced upward.

The benchmark yield ended last week at 4.81%, after climbing as high as 4.90% following the country’s stronger-than-expected December inflation print. Following the price data, swap markets are pricing a 73% probability of a quarter-point rate hike by the Reserve Bank of Australia this week, with two fully priced by August.