Bond investors scaled back bets on a rate cut after the Reserve Bank of Australia reiterated on Tuesday that inflation was still too high and “does not rule out any impact” on future policy decisions.

At its board meeting on Tuesday, the RBA kept the cash rate at 4.35 per cent, the highest level in 12 years, the same as last year. Markets also expected the central bank to fire as core inflation remained sticky and the labor market remained strong.

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