Australian bonds lower in early trade tracking U.S. Treasuries on heavy corporate debt supply

The Australian bonds traded lower on the last trading day of the week, tracking similar movement in the U.S. counterpart, weighed down by the government and corporate debt supply, and as investors evaluated the Federal Reserve's statement that it is closer to paring its balance sheet.

The yield on the benchmark 10-year Treasury note, which moves inversely to its price, rose nearly 1 basis point to 2.70 percent, the yield on 15-year note hovered around 3.00 percent and the yield on short-term 2-year traded 1-1/2 basis points higher at 1.82 percent by 04:10 GMT.

U.S. Treasury prices fell overnight on Thursday as the market was weighed down by the government and corporate debt supply, and as investors evaluated the Federal Reserve's statement that it is closer to paring its balance sheet. The Treasury Department sold USD28 billion in seven-year notes to fair demand, the final sale of USD88 billion in coupon-bearing supply this week.

In addition, final demand producer prices in Australia climbed 0.5 percent on quarter in the second quarter of 2017, the Australian Bureau of Statistics said on Friday, unchanged from the previous three months. On a yearly basis, producer prices jumped 1.7 percent, accelerating from 1.3 percent in the three months prior.     

Meanwhile, The S&P/ASX 200 index slumped 1.40 percent to 5,633.50 by 04:20 GMT, while at 04:00GMT, the FxWirePro's Hourly AUD Strength Index remained highly bullish at -50.19 (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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