Australia’s 10-year government bond yield fell below 5%, but stayed near multi-year highs as investors assessed renewed diplomatic signals between the US and Iran and the Reserve Bank of Australia’s latest policy remarks. Speaking at an event in New York, Deputy Governor Andrew Hauser said interest rates would need to rise to a level that brings inflation back to the 2%-3% target band. However, he noted that policymakers would need to monitor the economic impact of the Iran conflict. The odds of a rate hike next month edged up to 72% from 69% after his remarks, with markets now awaiting key labor market data this week for further policy cues. Meanwhile, Australian consumer confidence slumped sharply in April as surging fuel prices and another rate hike triggered the steepest decline since the pandemic. Elsewhere, oil prices fell as US and Iranian officials signaled willingness to extend negotiations toward a longer-term ceasefire after weekend talks failed to reach an agreement.
