FX.co ★ Australia 10-Year Yield Eases

On Wednesday, the yield on Australia's 10-year government bond decreased to 4.76%, pulling back from its highest point in over two weeks. This decline comes in the wake of strong demand at the government's issuance of new 2037 Treasury bonds. The government successfully auctioned A$15 billion worth of these bonds through a syndicated offer, which drew bids totaling nearly A$67 billion. Investor focus is now shifting to the looming December employment report scheduled for release on Thursday, a critical factor that might shape expectations regarding the Reserve Bank of Australia's (RBA) forthcoming policy decisions. Should the report show significant weakness, it may diminish the chance of an imminent interest rate hike, although attention also pivots to the fourth-quarter inflation figures anticipated next week. Currently, market participants estimate a roughly 30% probability of a 25-basis-point rate increase by the RBA during its February meeting. Earlier this week, bond yields rose sharply due to a significant sell-off in Japanese government bonds and tensions arising from US President Donald Trump's disagreements with European allies concerning Greenland.