Australian 10-year bond yields near 2-month high following global debt sell-off post ECB meeting minutes overnight

The Australian 10-year bond yields surged to near 2-month high on the last trading day of the week as the shift underway in global fixed income markets continues after minutes from the European Central Bank’s (ECB) June meeting showed that the committee members had discussed the potential of monetary stimulus withdrawal.

The yield on the benchmark 10-year Treasury note, which moves inversely to its price, jumped 8 basis points to 2.67 percent, the yield on 15-year note also surged 8 basis point to 3.02 percent and the yield on short-term 2-year traded nearly 3-1/2 basis points higher at 1.74 percent by 03:50 GMT.

ECB policymakers are open to a further step toward reducing their monetary stimulus but are likely to move slowly out of fear of causing market turmoil, minutes of their last meeting showed on Thursday. With inflation in the euro zone slowly rebounding, the ECB is preparing to dial back its stimulus policy of ultra-low rates and massive bond purchases, but doing so without upsetting investors is proving a challenge after years of easy money, Reuters reported.

Meanwhile, the ASX 200 index slumped 0.63 percent to 5,642.00 by 03:50GMT, while at 03:00GMT, the FxWirePro's Hourly AUD Strength Index remained highly neutral at -38.70 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex

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