Australian bonds rise slightly on weak investors’ sentiments; 10-year yields down over 3 bps this week

Australian bonds rise slightly on the last day of the week as investors moved away from riskier assets including equities and crude oil. In addition, markets will focus on the next week’s RBA November meeting minutes and Governor Lowe speech.

The yield on the benchmark 10-year Treasury note, which moves inversely to its price, fell 1 basis point to 2.591 percent, the yield on the long-term 30-year note also dipped 1 basis point to 3.371 percent and the yield on short-term 2-year declined 1 basis point to 1.793 percent by 02:30 GMT.

The Australian bonds have been closely following developments in oil markets because of their impact on inflation expectations. The International benchmark Brent futures moved lower 0.33 percent to USD61.16 and West Texas Intermediate (WTI) fell 0.10 percent to USD55.31 by 02:00 GMT. Oil prices steadied on Friday after recent declines, but were on track for their first weekly fall in six weeks as concerns about surging U.S. supplies put a dent in the market's recent rally.

On Thursday, 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 0.44 percent lower at 5,968 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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