The Australian bonds dived Friday as investors cashed in profits on the last day of the week amid mild rise in equities. Further, the Federal Reserve Chair Janet Yellen’s recent comments, hinting at a possible hike this month, added to the move.
The yield on the benchmark 10-year Treasury note, which moves inversely to its price, jumped 4 basis points to 2.98 percent, the yield on 15-year note climbed 3-1/2 basis points to 3.37 percent and the yield on short-term 3-year traded 1-1/2 basis points higher at 2.14 percent by 04:30 GMT.
Latest ADP data showed U.S. private payrolls grew by 298,000 jobs last month, the largest increase since December 2015. The gain was well above economists' expectations for a 190,000 increase. The solid report made it almost certain the U.S. Fed will hike rates at its March 14-15 meeting, and increased the likelihood of more rate rises during the year.
Further to that, recent comments from the Fed Chair Yellen, specifying that a March rate hike is definitely on the cards, if the economy holds momentum, added to the rise in market expectations and investors have quite already price in for a rate hike this month.
Meanwhile, the ASX 200 index traded 0.36 percent up at 5,774.50 at 04:40GMT, while at 04:00GMT, the FxWirePro's Hourly AUD Strength Index remained neutral at -56.79 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex
