The Zhitong Finance App learned that Australian bond yields fell to a 13-month low amid growing speculation that the Reserve Bank of Australia is about to start cutting interest rates. The data showed that the yield on the benchmark 10-year Australian Treasury bond fell 5 basis points to 3.88%, the lowest level since July 2023; the policy-sensitive 3-year Australian Treasury yield also fell 5 basis points.

Last week, the Reserve Bank of Australia remained on hold for the sixth time in a row, keeping cash interest rates at the highest level in 12 years, and reiterated that it “does not rule out any possibility” in terms of policy. The Interest Rate Setting Committee said in a statement: “The policy will need to be sufficiently restrictive until the committee is convinced that inflation is moving sustainably towards the target range.” Furthermore, Reserve Bank of Australia Chairman Bullock said at the press conference that there is still a risk that inflation will return to the target; it may take a long time, and interest rates may stay high for longer.

However, bond investors are unconvinced by the RBA's relatively tough stance. After slowing inflation prompted the Reserve Bank of New Zealand to cut official cash interest rates on Wednesday, bets on implementing an easing policy on the Reserve Bank of Australia heated up. At the same time, expectations that the Federal Reserve will cut interest rates as early as next month have also opened room for other major central banks to relax their policies.

Kenneth Crompton, senior fixed income strategist at the National Bank of Australia in Sydney, said: “Investors' interpretation of Australia is that yesterday's shift of the New Zealand Federal Reserve was more dovish than expected, and the US inflation data was weaker than expected.”

Currently, investors' attention is turning to the Australian employment report to be released later on Thursday to see if the labor market has loosened, which may also increase the possibility that the Reserve Bank of Australia will cut interest rates. Overnight swaps suggest that the Reserve Bank of Australia will begin a series of interest rate cuts in December.