Short-term Australian bonds edge down ahead of RBA April monetary policy decision

Australian short-term government bonds eased on the first trading day of the week Monday, with buying limited ahead of the Reserve Bank of Australia (RBA) April monetary policy decision.

The yield on Australia’s benchmark 10-year note, which moves inversely to its price, rose 1/2 basis point to 2.600 percent, the yield on the long-term 30-year note climbed 1-1/2 basis points to 3.194 percent and the yield on short-term 2-year jumped 2-1/2 basis points to 2.045 percent by 03:05 GMT.

Today, the Reserve Bank of Australia (RBA) is scheduled to meet for its next monetary policy meeting, where it is expected to keep its official cash rate unchanged at a record low of 1.50 percent. However, the Australian central bank’s statement tone will be watched closely to understand future policy direction.

We expect that there will be no big changes to the RBA's outlook as compared to the previous statements, but the central bank will continue to show more confidence in the growth outlook, believing that the downside risks have subsided.

In the United States, Treasuries found some support related to equity market weakness, driven by further selling in tech stocks. On the data front, markets received weaker than expected readings from ISM manufacturing, decreasing to 59.3 in March, from 60.8 in February and construction spending, increasing 0.1 percent m/m in February, versus the unchanged m/m reading seen for January.

Meanwhile, the S&P/ASX 200 index traded 0.24 percent lower at 5,732.5 by 03:10 GMT, while at 03:00GMT, the FxWirePro's Hourly AUD Strength Index remained highly bullish at 124.62 (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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