Australian bonds remain flat in subdued trading ahead of RBA July meeting minutes

The Australian bonds traded flat Monday as investors remained muted in a silent trading session ahead of the Reserve Bank of Australia’s (RBA) July monetary policy meeting minutes, scheduled to be released on July 18.

The yield on the benchmark 10-year Treasury note, which moves inversely to its price, hovered around 2.73 percent, the yield on 15-year note remained tad higher at 3.03 percent while the yield on short-term 2-year traded flat at 1.84 percent by 03:40 GMT.

US inflation data came in below expectations, while other economic data mostly disappointed. It added to more cautious commentary from the Federal Reserve over the past week, reinforcing expectations of a slower pace of monetary tightening by the Federal Reserve.

Equity markets rallied in the face of weak US economic data. Investors were likely focusing on the prospect of more accommodative monetary policy. The weaker US dollar was supportive of commodity prices. Oil prices also gained as the increase in US oil rigs was slowing. Gold prices rose to their highest in two weeks.

Lastly, the country’s employment report for the month of June, due later this week will guide safe-haven bond markets more clearly.

Meanwhile, the ASX 200 index rose 0.23 percent to 5,718.50 by 03:50GMT, while at 03:00GMT, the FxWirePro's Hourly AUD Strength Index remained highly bearish at -105.00 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex

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