Australian bonds sink on profit-booking amid silent trading session

The Australian bonds sunk on the first trading day of the week as investors cashed in profits, following a silent trading session that witnessed data of less economic significance. Also, the US and UK markets will remain closed today on account of Memorial Day and Bank Holiday, which further lent dullness to financial markets.

The yield on the benchmark 10-year Treasury note, which moves inversely to its price, jumped 2 basis points to 2.44 percent, the yield on the 15-year note climbed nearly 1-1/2 basis points to 2.83 percent and the yield on short-term 2-year traded nearly 2 basis points higher at 1.60 percent by 03:50 GMT.

The Australian dollar was sidelined in quiet trading on Monday after failing to hold above chart resistance and looked vulnerable to declining iron ore prices, reports said.

Undermining the Aussie was Commodity Futures Trading Commission data showing speculators had further reduced their long Aussie positions for the week to May 23 to be a net long 2,635 contracts from 6,344 the week before.

In contrast, weak signals form the Australian economy are forcing economists to revise their Q1 growth forecasts; some even speculating a downward revision.

Meanwhile, the ASX 200 index traded 0.58 percent down at 5,759.50 by 04:00GMT and the FxWirePro's Hourly AUD Strength Index remained neutral at -72.87 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex