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Australian bonds traded nearly flat during late Asian session Tuesday after the Reserve Bank of Australia (RBA) remained on hold at its monetary policy meeting held today, citing sustained expansion in global economic growth. Investors will now keep a curious eye on the country’s gross domestic product (GDP) for the second quarter of this year, scheduled to be released on September 5 by 01:30GMT for further direction in the debt market.
The yield on Australia’s benchmark 10-year note, which moves inversely to its price, remained tad lower at 2.520 percent, the yield on the long-term 30-year bond hovered around 3.039 percent and the yield on short-term 1-year traded flat at 1.977 percent by 05:10GMT.
At its meeting today, the RBA Board decided to leave the cash rate unchanged at 1.50 percent, citing continuous global economic expansion. A number of advanced economies are growing at an above-trend rate and unemployment rates are low. Growth in China has slowed a little, with the authorities easing policy while continuing to pay close attention to the risks in the financial sector, the RBA’s monetary policy statement read.
Globally, inflation remains low, although it has increased in some economies and further increases are expected given the tight labour markets. One ongoing uncertainty regarding the global outlook stems from the direction of international trade policy in the United States.
Further, the Bank's central forecast is for growth of the Australian economy to average a bit above 3 percent in 2018 and 2019. In the first half of 2018, the economy is estimated to have grown at an above-trend rate. Business conditions are positive and non-mining business investment is expected to increase.
Meanwhile, the S&P/ASX 200 index traded 0.43 percent lower at 6,299.5 by 05:15GMT, while at 05:00GMT, the FxWirePro's Hourly AUD Strength Index remained neutral at -71.75 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex
