Australian bonds remain volatile amid mixed employment report; investors digest weak wage growth data

Australian bonds remained volatile on Thursday after October employment report portrayed a mixed picture of the economy. However, the investors still digest yesterday’s weak wage growth numbers, which is expected to keep away the Reserve Bank of Australia for any policy experiments.

The yield on the benchmark 10-year Treasury note, which moves inversely to its price, fell 1/2 basis point to 2.595 percent, the yield on the long-term 30-year note jumped 1 basis point to 3.376 percent and the yield on short-term 2-year declined 1 basis point to 1.806 percent by 03:50 GMT.

Australian employment rose for a 13th straight month in October, the longest stretch of gains since the early 1990s, while the jobless rate dipped to its lowest in over 4-1/2 years. Australia's unemployment rate fell to 5.4 percent in October from 5.5 percent in the previous month, beating economic forecasts, latest figures from the Australian Bureau of Statistics showed.

Net 3.7K jobs were added in October, with 24.3K full-time positions added and 20.7K part-time ones cut. However, the firms might be scooping up workers they are not so keen to pay them more, leaving wage growth near record lows and putting an unwelcome cap on consumer spending and inflation.

Weak wages data will force the Reserve Bank of Australia to move away from any policy experiments until a new set of data is released.

Meanwhile, the S&P/ASX 200 index traded nearly flat at 5,953 by 03:55 GMT, while at 03:00GMT, the FxWirePro's Hourly AUD Strength Index remained neutral at -64.06 (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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