Australian bond yields tumble after Treasuries fall

Australian bond yields tumble after Treasuries fall

The Aussie bond yields slumped in early trading Friday after Treasuries, as weak economic data from Europe to the U.S. added to growing recessionary fears.

The yield on Australian debt fell by 17 basis points to 3.67% in the first year, while the yield on three-year notes dropped 17 basis points to 3.18%. Yields on the more rate sensitive three-year benchmark have fallen 46 basis points this week and are headed for the biggest weekly drop since August 2011.

Australia's bonds have been whipsawed this month after the RBA raised rates more than economists forecast, and Governor Philip Lowe said policy makers would do what is necessary to bring inflation down. The 10 year bond yield went to 4.26% last week, the highest since January 2014, before tumbling as investors worried that central bank hikes will push economies into recession.

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