Australia 10-Year Yield Eases
Australia's 10-year government bond yield decreased to 4.36%, following a surge to a one-and-a-half-month high in the previous session, spurred by unexpectedly robust GDP data. The economy demonstrated an expansion of 0.6% in the June quarter, surpassing the anticipated 0.5% increase, with annual growth reaching its most vigorous pace in almost two years, largely fueled by household consumption. This positive surprise has reinforced the expectation that the Reserve Bank of Australia is likely to maintain current interest rates later this month. Further data released today aligns with this outlook. Australia's goods trade surplus expanded to A$7.31 billion in July from A$5.37 billion in June, due to a 3.3% rise in exports and a 1.3% decrease in imports. Additionally, household spending surged by 5.1% year-over-year in July, marking the most substantial growth since November 2023, following a 4.6% increase in June. On Wednesday, RBA Governor Michele Bullock cautioned that additional interest rate cuts might be unlikely if consumer spending continues to grow rapidly.
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