Australian bonds rally in muted trade ahead of October employment report, RBA Assistant Gov Debelle’s speech

Australian bonds rallied during Asian session Wednesday 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.

Also, the Reserve Bank of Australia’s (RBA) Assistant Governor Guy Debelle is scheduled to deliver a speech on the same day at 07:00GMT.

The yield on Australia’s benchmark 10-year note, which moves inversely to its price, slumped 2 basis points to 2.714 percent, the yield on the long-term 30-year bond fell 1-1/2 basis points to 3.226 percent, and the yield on short-term 2-year traded 1 basis point lower at 2.067 percent by 03:40GMT.

Australia’s wage price index (WPI) rose by 0.6 percent q/q and 2.3 percent y/y in Q3, in line with market expectations but a bit softer than we expected, given the recent increase to the minimum wage. Public and private sector wage growth both rounded to 0.6 percent q/q, but in annual terms public sector wages pulled ahead to 2.5 percent y/y versus 2.1 percent y/y for the private sector.

Further, the NAB business conditions index receded to 12 points in October, from 15 points in November. Confidence also slid among businesses, from 6 points in September to 4 points in October.

Meanwhile, the S&P/ASX 200 index traded 1.25 percent lower at 5,754.5 by 03:45GMT, while at 03:00GMT, the FxWirePro's Hourly AUD Strength Index remained neutral at -56.01 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex