Australia’s 10-year government bond yield dropped toward 4.30%, further retreating from a five-week high touched last week, as investors sought safer assets amid renewed concerns over a potential US-China trade war. While President Trump hinted that he may not follow through with his massive tariff threat against China, markets remained cautious of the potential economic fallout between the world’s two largest economies. Meanwhile, Governor Michele Bullock recently noted that Australia’s economy is performing well, with inflation remaining within the target range, though showing some signs of stickiness, and the labour market continuing to demonstrate strength. This reinforces the central bank’s cautious view on additional easing. Investors are now looking to the RBA meeting minutes later this week, as well as upcoming speeches by central bank officials, for further insights.