The Australian bond prices edged down, sending yields higher on Thursday as investors cooled on safe-haven assets amid gains in riskier assets including stocks and oil. The yield on the benchmark 10-year Treasury note which moves inversely to its price, moved higher 2.76 pct to 2.604 pct and the yield on the 2-year Treasury bond ticked up 1.44 pct to 2.039 pct by 0525 GMT.
The Australian bonds have been closely following developments in oil markets because of their impact on inflation expectations, which are well below the Reserve Bank of Australia's target. Crude oil prices jumped as Energy Information Administration's (EIA) showed that crude stock rose lower than the market expectation last week. The crude inventories rose 2.1 million barrels, from prior build of +6.6 million barrels for the week ending 15 April. This came alongside a decreases seen in gasoline inventories of -0.1million barrel, from prior -4.2 million barrel and distillate inventories of -3.6 million barrel, as compared to a build of +0.5 million barrel seen prior. Moreover, Market speculation that Petroleum Exporting Countries (OPEC) and Russia will meet in Moscow next month to again strike a deal on oil output freeze, boosted crude oil investors confidence. But, Russian Energy Minister Alexander Novak denied about any such meeting happening in Russia in May.
On Sunday, the negotiations between Petroleum Exporting Countries (OPEC) and Russia failed to reach an agreement in the Doha round of talks to strike a deal on oil output freeze. The International benchmark for crude oil prices, Brent futures rose 0.13 pct to $45.85, while West Texas Intermediate crude oil jumped 0.18 pct to $44.26 by 0525 GMT.
“Global rates markets had finally shifted out of the narrow range that had confined yields for the past 10 days and Australian bond yields had tracked other markets with a notable shift higher”, said ANZ economists in a note.
"We expect this move to keep yields on the higher end of the range today," they added
The investors will now look forward to next week’s FOMC meeting on Wednesday, 27th April and U.S Q1 GDP figure on Thursday, 28th April (1230 GMT).
Meanwhile, Australia's S&P/ASX 200 rose 0.06 pct to 5,240 by 0525 GMT, after an overnight rise in oil prices.
