Australian bond yields plunge after RBA July meeting minutes hint at further policy easing

Australian government bond yields plunged during Asian session of the second trading day of the week Tuesday after the Reserve Bank of Australia’s (RBA) July monetary policy meeting minutes hinted at further easing in its benchmark interest rate at its upcoming meetings.

The yield on Australia’s benchmark 10-year note, which moves inversely to its price, plunged nearly 8 basis points to 1.387 percent, the yield on the long-term 30-year bond slumped 7-1/2 basis points to 2.044 percent and the yield on short-term 2-year traded nearly 5-1/2 basis points down at 0.954 percent by 04:20GMT.

The minutes of the RBA board meeting in July provided further detail behind the rationale for lowering official interest rates at its last two meetings. Moreover, the RBA indicated an openness for further easing.

The RBA stated it "would continue to monitor developments in the labour market closely and adjust monetary policy if needed to support sustainable growth in the economy and the achievement of the inflation target over time".

While the RBA is continuing to indicate an openness for further monetary easing, the language in the minutes is less explicit than a month ago and suggests less urgency in another near-term rate cut.

Meanwhile, the S&P/ASX 200 index remained tad lower at 6,587.50 by 04:25GMT