Disappointing Australian economic growth cools rate hike expectations.

Australia's economic growth unexpectedly slowed in the last quarter, making the prospects of the economy's underlying strength uncertain and also indicating that the market's pricing for rate hikes may have been too hasty. Data released by the Australian government on Wednesday showed that in the three months to September, the gross domestic product grew by 0.4%, lower than the expected 0.7% and also lower than the upwardly revised 0.7% from the previous quarter. The annual growth rate was 2.1%, also below the expected 2.2% growth. Following the release of the data, the Australian dollar fell, and the yield on the policy-sensitive three-year Australian government bonds also declined. The currency market believes that the probability of the Reserve Bank of Australia keeping rates unchanged by the end of 2026 is over 50%. And before the data was released, the market expected a rate hike by the end of next year. This GDP data release is less than a week away from the Reserve Bank of Australia's last policy decision of the year. It is widely expected that after three rate cuts this year, the decision will maintain the rate at 3.6%. The Reserve Bank of Australia expects that with falling borrowing costs, stable household incomes, and strong population growth, Australia's economic growth will approach the "potential" growth rate of 2% by 2026. At the same time, inflation remains uncomfortably high, and the Reserve Bank of Australia believes that the labor market is still somewhat tight, highlighting the need for the rate-setting committee to seek a delicate balance in policy.