Australian bonds traded narrowly mixed Monday as investors awaited the Reserve of Australia monetary policy meeting scheduled to be held on Tuesday at 03:30 GMT. The central bank is widely expected to leave its benchmark interest rate unchanged at 1.50% as inflation and growth remain below the RBA target range.
The yield on the benchmark 10-year Treasury note, which moves inversely to its price, traded flat at 2.587 percent, the yield on the long-term 30-year note rose 1/2 basis point to 3.346 percent and the yield on short-term 2-year dipped nearly 1 basis point to 1.770 percent by 02:20 GMT.
According to the recent Reuters poll of economists, The RBA is seen to keep its official cash rate at a record low steady at its monthly policy meeting on Monday. Out of 48 economists polled by Reuters, 47 forecast the central bank would stand pat at its policy. While the majority predicted the RBA would leave rates steady until the mid-2018, 31 of the 44 economists predict that it would hike by Q4-2018, against one who expects an easing.
The RBA eased twice last year but has since held steady as it balances the risk of fuelling further borrowing in the country's red-hot property market against tepid inflation.
In the United States, Treasuries saw modest gains in the wake of the relatively lackluster October employment report, highlighted by a 261k increase in non-farm payrolls but ultimately undermined by an unchanged m/m reading seen for average hourly earnings. Additionally, markets receive 3-year Note, 10-year Note and 30-year Bond auctions on Tuesday, Wednesday and Thursday, respectively.
Meanwhile, the S&P/ASX 200 index traded 0.13% lower at 5,931.5 by 20:30 GMT, while at 02:00GMT, the FxWirePro's Hourly AUD Strength Index remained slightly bearish at -93.28 (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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