Australian bonds flat in muted trading day ahead of RBA July meeting minutes, June employment data

Australian government bonds remained flat during Asian session of the first trading day of the week Monday, amid a muted session ahead of the Reserve Bank of Australia’s (RBA) July monetary policy meeting minutes, scheduled to be released on July 16 by 01:30GMT and the country’s employment data for the month of June, due on July 18 for further direction in the debt market.

The yield on Australia’s benchmark 10-year note, which moves inversely to its price, hovered around 1.462 percent, the yield on the long-term 30-year bond surged 1-1/2 basis points to 2.121 percent and the yield on short-term 2-year traded nearly flat at 1.008 percent by 03:30GMT.

Wall Street ended on a positive note on Friday, whilst the UST bonds gained (10-year bond yield at 2.12 percent) in general anticipation of the Fed’s likely rate cut at the July 30 FOMC meeting. Fed’s Evans (voter) has already endorsed 50bps cuts by year-end to “get the inflation outlook up” as “our current setting for policy is a little bit on the restrictive side," OCBC Daily Treasury Outlook reported.

"Asian markets may tread water today as market awaits China’s data dump later this morning which comprises its 2Q19 GDP growth (market is eyeing a moderation to 6.2 percent versus 6.4 percent in 1Q19, so any downside surprises may whipsaw the market), industrial production, retail sales and fixed asset investments," the report added.

Meanwhile, the S&P/ASX 200 index remained flat at 6,609.50 by 03:35GMT