The Australian bonds plunged after the Reserve Bank of Australia (RBA) remained on hold at today’s monetary policy meeting, hinting at no further policy easing in the near-term.
The yield on the benchmark 10-year Treasury note, which moves inversely to its price, rose 1 basis point to 2.82 percent, the yield on 15-year note also nearly 1-1/2 basis points to 3.23 percent while the yield on short-term 2-year traded nearly 1/2 basis point lower at 1.84 percent by 04:20 GMT.
The RBA has left the official cash rate on hold for a sixth straight meeting on signs the economy is strengthening and business investment has picked up. The decision to maintain rates at current levels comes as the labour market, inflation and wages growth continue to stutter at the same time that growth has recovered, housing prices continue to surge and business and consumer confidence hover around multi-year highs.
Further, the central bank expects the economy to grow around 3 percent annually over the next several years on steady consumption growth and expanding resource exports.