Australia 10-Year Yield Falls from Multi-Week Highs

Australia's 10-year government bond yield dropped to around 4.28% on Thursday, pulling back from an over five-week high reached in the previous session.

The decline followed a similar move in US bond yields after the Federal Reserve's June meeting minutes revealed that most policymakers believed it would be appropriate to lower rates this year.

On the domestic front, the Reserve Bank of Australia earlier this week held its cash rate steady at 3.85%, surprising markets that had nearly fully priced in a 25bps cut.

While the RBA maintained a cautious stance, it acknowledged that the risks to inflation were more balanced and appeared to be waiting for the second-quarter CPI report, due at the end of July, before deciding.

Following the decision, market expectations shifted, now pricing in an 85% probability that the central bank will cut rates to 3.60% at its August meeting.