Australia: Aussie Holds Near Multi-Month Highs.

The Australian dollar hovered below $0.72, holding near its highest level since early June as a global bond selloff kept investors cautious. Rising concerns over US budget deficits and debt levels pushed Treasury yields higher, while Australian markets faced pressure from expectations that interest rates may need to stay elevated for longer to curb inflation. Markets now see a 54% chance of a 25-basis-point RBA rate hike to 4.60% on September 29, up from just 10% a week earlier, while the probability of another increase to 4.85% stands at 40%. Rate-hike expectations strengthened even as recent data pointed to weaker economic momentum, with net exports and government spending suggesting the economy slowed in the second quarter. Investors now await the Q2 GDP report due Wednesday, with economists expecting growth of just 0.3% quarter-on-quarter and annual growth to ease to 1.8% from 2.5%. Still, core inflation remains high at 3.6%, keeping pressure on the RBA to hike rates again.