Australian household spending increased more than expected, prompting traders to increase their bets on the central bank's interest rate hike next year.

Australia's October household spending exceeded expectations, marking the largest increase since January 2024 and providing support for the central bank's interest rate hike next year. Data released by the Australian Bureau of Statistics on Thursday showed that consumer spending rose by 1.3% month-on-month in October, surpassing economists' previous expectations of a 0.6% increase; on a year-on-year basis, it rose by 5.6%, higher than the expected 4.6%. As a result, the yield on Australia's 3-year government bonds exceeded 4% for the first time since January, rising by as much as 6 basis points, and the Australian dollar strengthened accordingly. Currency market traders have increased their bets on a rate hike next year, with the probability of a rate hike in May rising from 18% on Wednesday to 55%.