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The yield on the 10-year Australian government bond rose to 0.95% on Friday, the highest level since July 2, after Reserve bank of Australia’s (RBA) governor Lowe said negative interest rates are unlikely in Australia. 

“It’s possible the cash rate will be 0.25% for the next five years,” Lowe said while speaking in front of the Parliament’s House of Representatives’ Standing Committee on Economics and added that conditions for rate rise may not be met for at least three years. 

In addition, the governor told Parliament that the economy could contract by 6% this year and grow by 5% in 2021 and 4% in 2022. 

Lowe’s comments on negative rates look to have lifted the 10-year yield. The Australian bond market may also be taking cues from the US treasury market, where yields have recently hardened. 

The US 10-year yield rose to 0.727% on Thursday, the highest level since June 24, having bottomed out at 0.504% on Aug. 6.