Australian long bond futures remained at two-month highs on Monday, benefiting from a global flight to safety as investors continued to sell stocks amid concerns about the troubled US subprime mortgage sector.
But the shorter end of the Aussie bond curve ran into some resistance as local investors stayed cautious ahead of a possible near-term domestic interest rate hike. Those worries came back after higher-than-expected consumer price index (CPI) data last week saw the market price in a better-than-even chance of a rate rise early next month.
Three-year bond futures were up 0.03 points at 93.72, matching six-week highs struck last Monday. The 10-year bond contract rose 0.03 points to 94.045, the highest since May 21. It had posted its biggest single-day jump since June 2005 on Friday.
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