Australia's consumer price index (CPI) for the second quarter showed a slowdown in core inflation, with the trimmed mean CPI rising 0.6% quarter-on-quarter, slightly below the forecast of 0.7%. Year-on-year, headline CPI eased to 2.1%, down from 2.4%, marking the lowest annual inflation rate since 2021. Core inflation, the Reserve Bank of Australia's (RBA) preferred measure, declined to 2.7% year-on-year from 2.9%. This moderation in inflation has strengthened expectations that the RBA will cut interest rates as early as August. Following the data release, Australian government bonds extended gains, with the three-year bond yield falling by 7 basis points to 3.35%. The Australian dollar showed cautious trading against the US dollar, reflecting the inflation data and awaiting the upcoming US Federal Reserve rate decision.