The Australian government bonds were trading modestly lower Monday after the data showed mixed bag of U.S. employment figures on Friday. Also, firm equities and rallying oil prices drove out investors from safe haven assets. The yield on the benchmark 10-year Treasury note which moves inversely to its price, rose 4 bps to 2.335 pct and the yield on the 15-year Treasury bond ticked higher 4 bps to 1.565 pct by 0504 GMT.
The April U.S. labour department employment situation report revealed overall 160k increase in non-farm payrolls, well below market expectations for a 200k increase, as compared to revised 208k result that occurred in March, previous was 215k. This comes alongside no change in the unemployment rate of 5.0 pct, above expectations for a 4.9 pct result. Moreover, average hourly earnings increased 0.3 pct m/m, from revised 0.2 pct m/m reading seen in March previous was 0.3 pct m/m).
In addition, the Australian bonds have been closely following developments in oil markets because of their impact on inflation expectations, which are well below the Reserve Bank of Australia's target. Today, crude oil prices jumped by more than 1 pct as a huge wildfire in Canada disrupted its oil sands production and strong Chinese oil imports last month. China’s crude imports rose 7.6 pct y/y in April, the third straight month that crude imports surpassed 30 million tons. The International benchmark Brent futures rose 1.34 pct to $45.98 and West Texas Intermediate (WTI) climbed 1.88 pct to $ 45.50 by 0515 GMT.
“Oil prices held as concerns over the impact of raging fires in Alberta,Canada, on supply from the oil sands projects lingered,” said ANZ economists in a research note on Monday.
Meanwhile, Australia's S&P/ASX 200 rose 0.25 pct to 5,279 by 0515 GMT.
The material has been provided by InstaForex Company – www.instaforex.com