Australian bonds climb tracking firm U.S. counterpart after consumer spending data disappoints

The Australian bonds climbed on the last trading day of the week Friday, tracking strength in the U.S. Treasuries after consumer spending data showed continuing low inflation, and as tensions with North Korea kept up demand for the safe haven bonds.

The yield on the benchmark 10-year Treasury note, which moves inversely to its price, slumped nearly 4 basis points to 2.69 percent, the yield on 15-year note also plunged 4 basis points to 2.98 percent and the yield on short-term 2-year also traded 1/2 basis point lower at 1.88 percent by 03:00 GMT.

The U.S. core personal consumption expenditures (PCE) price index increased 1.4 percent in the 12 months through July, the smallest year-on-year increase since December 2015.

Trading volumes were relatively low, however, with some investors reluctant to buy Treasuries given that yields are near their lowest levels since November. Today’s employment report for August is the next major economic focus. Employers are expected to have added 180,000 jobs in the month, according to the median estimate of 93 economists polled by Reuters.

Meanwhile, the S&P/ASX 200 index traded 0.12 percent higher at 5,702.50 by 03:10 GMT, while at 03:00GMT, the FxWirePro's Hourly AUD Strength Index remained neutral at 68.99 (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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