The minutes from the June meeting reveal that...>

RBA: The minutes from the June meeting reveal that "members noted, however, that

the yields on bonds with one to two years to maturity had risen to be a few

basis points higher than the yields on three-year bonds. This reflected the

lower level of liquidity in these short-term bonds and the tendency for demand

to taper off when bonds are no longer in the basket for the three-year bond

futures and as they approach maturity. Should these developments continue, the

Bank would consider purchasing bonds in the secondary market to ensure that

these short-term yields are consistent with the target for three-year yields.

10-year bond yields had been stable around very low levels. These low yields had

prevailed despite record issuance volumes, including the syndication by the

Australian Office of Financial Management (AOFM) of $19 billion of a new 10-year

bond, which had been met by very strong demand."