Australian bonds climb after February unemployment rate ditches market expectations

Australian government bonds gained on Thursday after unemployment rate for the month of February ditches market expectations, rising to 5.6 percent.

The yield on the benchmark 10-year Treasury note, which moves inversely to its price, fell 1 basis point to 2.700 percent, the yield on the long-term 30-year note traded 2 basis points lower at 3.278 percent and the yield on short-term 2-year slid 1/2 basis point to 2.038 percent by 02:40 GMT.

Australia’s unemployment rate surged higher last month as the number of part-time jobs declined while participation in the labour force climbed to its highest in 7-years.  The country’s jobless rate rises to 5.6 percent on a seasonally adjusted basis, up from 5.5 percent seen in the month of January. This is also higher than the market expectations of 5.5 percent.

In the United States, Treasuries saw a whipsaw response to the March FOMC statement, highlighted by an initial sell-off in the 10-year which was eventually followed by upward pressure as markets absorbed Fed Chair Powell's press conference. Overall, the statement continued to highlight similar themes seen in the early 2018 economic data as the overall pace of improvement appears to have moderated a bit.

Markets now look ahead to a milder flow of data on Thursday, highlighted by jobless claims, Markit US Manufacturing/Services PMI and leading indicators data.

Meanwhile, the S&P/ASX 200 index traded 0.02 percent lower at 5,924.5 by 03:20 GMT, while at 03:00GMT, the FxWirePro's Hourly AUD Strength Index remained neutral at -61.17 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex

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