Chances of a bumper double rate cut have sharply diminished, according to bond traders, buoyed by glimmers of a thaw between China and the United States after a month marked by a tariff tug-of-war.

Markets now expect the Reserve Bank of Australia to lower the cash rate by a quarter of a percentage point, assigning just a one-in-10 chance of a 50 basis point cut. That is down from about 40 per cent last week.