Australian bonds narrowly mixed in muted trading session; global stock market starts to recover

Australian government bonds remained narrowly mixed on the last trading day of the week Friday as investors remained side-lined amid a muted trading session that witnessed data of little economic significance. Further, the global stock market rout that started off lately also started to show signs of recovery in the overnight session.

The yield on Australia’s benchmark 10-year note, which moves inversely to its price, hovered around 2.611 percent, the yield on the long-term 30-year bond dipped nearly 1basis point to 3.108 percent and the yield on short-term 2-year rose nearly 1/2 basis point to 2.000 percent by 05:20GMT.

It was a more positive session in markets overnight. US data was mixed. No policy changes or shift in forward guidance from the ECB as it seeks to provide reassurance on its growth and inflation outlook. There are no data or key events in Australia today.

The AUD failed to break above 0.71 through the US session. With no domestic data of note today, the AUD is expected to remain under the influence of global factors, ANZ Research reported in its Australian Morning Focus.

Share markets rebounded, closing in the black for the first time in seven sessions.  Positive news from earnings, mostly from techs, supported gains. The Dow jumped 1.6 percent, while the S&P500 rose 1.9 percent, and the Nasdaq surged 3.0 percent, St. George Economics reported in its latest release.

Lastly, Federal Reserve Vice Chairman Richard Clarida provided an update assessment in a speech overnight, and supported the case for further rate increases.

Meanwhile, the S&P/ASX 200 index traded 0.42 percent lower at 5,666.50 by 05:30GMT, while at 05:00GMT, the FxWirePro's Hourly AUD Strength Index remained neutral at -59.80 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex