Australian bonds slump on profit-taking; U.S. Treasuries continue to weigh

Australian government bonds slumped on the last trading day of the week Friday as investors cashed in profits, tracking weakness in the U.S. Treasuries. Now, markets await next week’s employment report which might set a tone for the Reserve Bank of Australia in its next month’s monetary policy meeting.

The yield on Australia’s benchmark 10-year Note, which moves inversely to its price, rose 1-1/2 basis points to 2.796 percent, the yield on the long-term 30-year Note also climbed 1-1/2 basis points to 3.295 percent and the yield on short-term 2-year up 1 basis point to 2.033 percent by 03:20 GMT.

In the United States, Treasuries saw upward pressure in the long-end of the curve following the well-subscribed 30-year Bond auction, contrasted by weaker performance in the 2-year Note. In terms of data, markets were greeted by further upward pressure in consumer prices, increasing +0.2 percent m/m on the headline and +0.1 percent m/m on the core, though stopped well short of ringing alarms of runaway inflation in the series core y/y increase held unchanged at +2.1 percent.

Meanwhile, jobless claims held unchanged around 211K, continuing to highlight maintained support in the labor market as summer approaches. Markets now look ahead to a milder flow of data to finish off the week on Friday, highlighted by import prices and University of Michigan consumer sentiment releases. 

Meanwhile, the S&P/ASX 200 index traded 0.03 percent lower at 6,108.5 by 03:35 GMT, while at 03:00GMT, the FxWirePro's Hourly AUD Strength Index remained slightly bullish at 91.65 (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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