Australian bonds rally tracking strength in U.S. Treasuries after rise in initial jobless claims

The Australian bonds rallied on the last day of the week, tracking strength in the U.S. counterpart after reading the slightly higher initial jobless claims release later yesterday.

The yield on the benchmark 10-year Treasury note, which moves inversely to its price, plunged a little over 3 basis points to 2.42 percent, the yield on 15-year note also slumped 3 basis points to 2.82 percent and the yield on short-term 2-year traded 1-1/2 basis points lower at 1.58 percent by 03:30 GMT.

Initial jobless claims for the week ending May 20 edged slightly higher to 234k (+1k). The increase in claims was lower than expected of 238k and brings the four-week moving average lower to 235k. Weekly initial jobless claims now stand close to historical lows while the four-week moving average in initial claims set a new low for this recovery.

Further, continuing claims for the week ending May 13 rose to 1923k (previous: 1899k), but remain below the 2mn level for the sixth consecutive week. The insured unemployment rate held steady at 1.4 percent. At the state level, claims fell in 25 of 53 states covered, with the largest declines recorded in Oregon, Tennessee, and Connecticut. On the other hand, Michigan and California reported the largest increase in claims (+3k).

Meanwhile, the ASX 200 index traded 0.58 percent down at 5,759.50 by 04:10GMT, while at 04:00GMT, the FxWirePro's Hourly AUD Strength Index remained highly bearish at -148.43 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex