Australian bonds mixed as unemployment rate falls to 2-year low, inflation expectations decline

The Australian government bonds traded mixed Thursday as country’s official unemployment rate declined to two-year low in August. On the other contrary, Melbourne Institute Consumer Inflation Expectations lowered its inflation expectations for September.

The yield on the benchmark 10-year Treasury note, which moves inversely to its price, fell nearly 1 basis point to 2.161 percent, the yield on long-term 15-year note also dipped 2 basis points to 2.550 percent and the yield on short-term 3-year climbed 1-1/2 basis points to 1.647 percent at 04:50 GMT.

Australia's August unemployment rate declined to two-year low of 5.6 percent, as compared to the previous 5.7 percent in July. Surprisingly, employment data fell to 3.9K (seasonally adjusted) market was expecting a rise of 15K, as compared to the previous 25.3K. Additionally, the full-time jobs rose 11.5K while part-time jobs fell 15.4K.

Moreover, the Melbourne Institute Consumer Inflation Expectations lowered its inflation expectations for September to 3.3 percent, from 3.5 percent in August.

“The RBA would be relatively comfortable with today’s report. Although employment growth has slowed, the decline in unemployment is consistent with its view that the unemployment rate is grinding lower. Australia September consumer inflation expectations rose 3.3 percent, from 3.5 percent in August,” said ANZ in a research note.

Meanwhile, the benchmark Australia's S&P/ASX 200 index traded 0.31 percent higher to 5,214.5 by 04:50 GMT.