Australian bonds remain nearly flat amid muted trading session

Australian government bonds remained nearly flat during Asian session of the first trading day of the week Monday as investors remained side-lined amid a muted trading session that witnessed data of little economic significance.

The yield on Australia’s benchmark 10-year note, which moves inversely to its price, hovered around 1.788 percent, the yield on the long-term 30-year bond edged tad higher to 2.433 percent and the yield on short-term 2-year remained flat at 1.346 percent by 03:50GMT.

Global risk appetite may sustain to start this week after the US economy expanded a better than expected 3.2 percent (forecast: 2.3 percent), aided by net exports (+1.03 percent point to growth) and rising private inventories (+0.65 percent), OCBC Treasury Research reported.

Friday’s market action saw the S&P500 hitting a fresh record close, but the 10-year UST bond yield dipped 3bps to 2.5 percent as investors remained concerned that consumer spending had cooled for a third straight quarter to 1.3 percent (slowest since 2013) which suggested that growth momentum going ahead will ease, the report added.

Meanwhile, the S&P/ASX 200 index traded tad 0.57 percent lower at 6,333.00 by 03:55GMT, while at 03:00GMT, the FxWirePro's Hourly AUD Strength Index remained neutral at -44.96 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex