Australia's June inflation is below expectations, causing the Australian dollar and bond yields to fall and reducing the probability of a rate hike in August

(1) Australia’s June inflation data came in below market expectations, easing the pressure on the Reserve Bank of Australia to adjust monetary policy in the short term and giving it more room to continue assessing the economic outlook. Following the data release, both the Australian dollar and government bond yields fell.
(2) The Reserve Bank of Australia had raised interest rates at the first three meetings earlier this year to address inflationary pressures that had emerged even before the global energy shock triggered by the US-Iran war. The latest CPI figures show that, although prices remain elevated, the central bank is unlikely to tighten monetary policy again on August 11, when updated quarterly forecasts will be released.
(3) Lower-than-expected inflation gives the Reserve Bank of Australia room to wait and see, allowing it to make decisions after further evaluating the transmission effects of the global energy shock and changes in domestic demand.