Australian bonds trade flat despite better-than-expected November retail sales

Australian government bonds traded flat during Asian session Friday as investors remain sidelined in quiet trading session despite better-than-expected November retail sales data.

Retail sales beat expectations slightly in November, rising 0.4 percent m/m. Clothing and household goods sales improved, likely reflecting the growing popularity of Black Friday sales in November, which in the presence of stiff price competition implies higher sales volumes.

The yield on Australia’s benchmark 10-year note, which moves inversely to its price, traded flat at  2.315 percent, the yield on the long-term 30-year bond remained steady at 2.843 percent and the yield on short-term 2-year stood at 1.899 percent by 04:00GMT.

“The U.S. Treasury yields pushed slightly higher following additional Fed talk, in which the need for flexibility in setting policy and the potential for a pause in increasing rates were reiterated. Domestically, focus will be on whether funding pressures remain elevated after they ticked higher yesterday,” said ANZ economists in the note.

Meanwhile, the S&P/ASX 200 index traded 0.37 percent lower at 5,730.50 by 04:10GMT, while at 04:00GMT, the FxWirePro's Hourly AUD Strength Index remained highly bullish at 151.79 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex