Australian bonds steady in subdued trade; unemployment rate in focus

The Australian government bonds trade nearly flat Tuesday, succumbing to thin trading activity during a relatively quiet session that witnessed data of little significance.

The yield on the benchmark 10-year Treasury note, which moves inversely to its price, hovered around 2.11 percent mark and the yield on short-term 2-year remained steady at 1.60 percent at 04:00 GMT.

Assistant Governor of the Reserve Bank of Australia, Christopher Kent said that there is reasonable prospect of sustaining economic growth in Australia and plausible terms of trade will stabilise, given rise in commodity prices this year. Further, he expects more than three-quarters of expected fall in mining investment and the largest drag on GDP growth from mining has now become a past.

He further added that there is reasonable prospect for further decline in unemployment. He sees good prospect for gradual lift in wages growth, inflation. Lastly, he also mentioned that Australian dollar did not fall as much as implied by terms of trade, due to global policy easing and the outlook for Chinese economy remains a key source of uncertainty.

In term of recent economic data, Australia August business confidence rose to 6, compared to 4 in July, while business conditions fell to 7, compared to 9 in July, revised from 8.

Lastly, investors will remain keen to focus on the Thursday’s unemployment rate data, which is expected to remain unchanged at 5.7 percent in August period.

Meanwhile, the benchmark Australias S&P/ASX 200 index traded 1.04 percent lower to 5,210.5 by 04:10 GMT.