Australian bonds are lower on speculation that a job rise in the U.S. will lead to an easing of bond buying by the Federal Reserve. According to a report by the U.S. that claimed 195,000 new jobs emerged in June.

This figure is higher than the expected 166,000 new positions.

According to a statement by Michael McCarthy, chief market strategist at CMC Markets, Australian bond prices for 10-year futures would be affected by the higher than expected 70,000 combined growth in jobs during April and May.

Mr. McCarthy was quoted by Courier Mail as saying, "Those much stronger-than-expected numbers for the month, plus an upward revision of previous months' numbers, have pushed forward the idea that stimulus will tamper very soon.”

As the unemployment rate in the U.S. now tags at a firm 7.6% with modest fluctuations from month to month, the rapid incline in jobs is likely to translate into a policy where quantitative easing and stimulus packages initiated during the subprime mortgage crisis.

This would also signal a decrease in bond purchasing by the end of 2014, say reports.

With speculation of more rate cuts, " Mr. McCarthy noted that contract prices for three-year futures are "likely to be more volatile".

The contract for September 10-year bond futures held at 96.000 with a yield of 4% at 08:30 AEST. The figure is down from 96.165, reflecting a 3.835% yield on Friday.

In the meantime, the contract for September three-year bond futures tagged at 97.010 with a yield of 2.990%, slightly lower than Friday’s reading of 97.130, yielding 2.870%.