Australian 10-year-bond futures prices rose to a record high as disappointment set in over the outcome of last week’s summit of European leaders.

Eurozone leaders on the weekend agreed to sign a treaty that allows a central European authority greater oversight of national budgets in an effort to rein in sovereign debt.

The agreement initially sent bond prices lower but contracts rallied on Tuesday after Ratings agency Moody’s criticised the summit for having failed to produce “decisive policy measures”.

The ratings agency also threatened to review the credit ratings all of all European Union member states within the next three months.

Australian 10-year bond futures reached 96.175 (implying a yield of 3.825) during intraday trading, their highest yet.

Commonwealth Bank head of debt research Adam Donaldson said the negative sentiment pushed Australian bond futures higher on Tuesday.

“The big driver of that is clearly the weakness in the equity market and the risk-off flows we’ve seen over the past day, which is reflecting general disappointment at the progress in Europe,” he said.

He said bond prices could continue to rise as investors looked for a safe havens amid worsening global economic conditions.

“We remain pretty wary that we’re going to see more weakness in risky assets and therefore wouldn’t be surprised if we get a flight to quality for bonds coming though.”

At 1630 AEDT on Monday, the December 10-year bond futures contract was trading at 96.140 (implying a yield of 3.860 per cent), up from 96.065 (3.935 per cent) on Monday.

The December three-year bond futures contract was at 96.900 (3.100 per cent),up from 96.840 (3.160 per cent).