Australian bonds post sharp rebound on short-covering; investors eye RBA meeting minutes

The Australian bonds posted a sharp rebound at the start of the week Monday as investors covered previous short positions. Also, markets are eyeing the release of the Reserve Bank of Australia’s (RBA) monetary policy meeting minutes, scheduled to be released on March 21.

The yield on the benchmark 10-year Treasury note, which moves inversely to its price, slumped 5 basis points to 2.82 percent, the yield on 15-year note also plunged 5 basis points to 3.21 percent and the yield on short-term 2-year traded nearly 4 basis points lower at 1.80 percent by 04:40 GMT.

The lift in the unemployment rate in February, released last week was disappointing, to say the least, and it now appears to be trending up. With other indicators suggesting that the labour market is in better shape than the official figures indicate, it is certainly hard to argue that any progress is being made in reducing surplus capacity in the labour market.

Lastly, markets will now be focussing on the RBA Deputy Governor Guy Debelle’s speech, scheduled to be held on March 22 for further direction in the debt market.

Meanwhile, the ASX 200 index traded 0.10 percent down at 5,763.50 at 05:10GMT, while at 05:00GMT, the FxWirePro's Hourly AUD Strength Index remained neural at -22.61 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex