Australian bonds jump in muted trading session ahead of October employment report

Australian bonds jumped during Asian session Tuesday amid a muted trading session that witnessed data of little economic significance. However, investors will keep a close eye on the country’s employment report for the month of October, scheduled to be released on November 15 for further direction in the debt market.

The yield on Australia’s benchmark 10-year note, which moves inversely to its price, slumped 3-1/2 basis points to 2.730 percent, the yield on the long-term 30-year bond fell nearly 1-1/2 basis points to 3.237 percent, and the yield on short-term 2-year too traded 1-1/2 basis points lower at 2.080 percent by 03:30GMT.

Australian business conditions continued to fall in October, with weakness across most indicators and industries. The weakness in the labour market indicators, particularly capacity utilisation, is disappointing, ANZ Research reported.

Wall Street was broadly lower yesterday as sentiment towards the tech stocks weakened. Further, Federal Reserve Bank of San Francisco President Mary Daly has said that the “economy is running above potential” and also stated that two to three rate increases will be appropriate over the next period of time.

Meanwhile, the S&P/ASX 200 index traded 0.35 percent lower at 5,843.5 by 03:40GMT, while at 03:00GMT, the FxWirePro's Hourly AUD Strength Index remained neutral at -55.4113 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex