Bond investors have tapered rate cut bets after the Reserve Bank of Australia reiterated on Tuesday that inflation was still too high, and it was not “ruling anything in or out” on future policy decisions.

At its board meeting on Tuesday, the RBA held the cash rate at a 12-year high of 4.35 per cent, where it has remained for the last year. Markets also expected the central bank to hold fire given that core inflation is proving sticky, and the labour market remains strong.