Menu

Search

  |   Commentary

Menu

  |   Commentary

Search

Australian bonds snap losses on short-covering despite rise in Q4 wage price index

Australian bonds snapped losses Wednesday as investors covered previous short positions despite a better-than-expected wage price index data for the fourth-quarter of this year, released early today.

The yield on the benchmark 10-year Treasury note, which moves inversely to its price, slumped 2 basis points to 2.88 percent, the yield on the long-term 30-year note fell nearly 1-1/2 basis points to 3.51 percent and the yield on short-term 2-year traded tad lower at 2.06 percent by 01:25 GMT.

Australian wages rose a fraction faster last quarter but private-sector growth stayed near historic lows as penny-pinching by business became an ever-greater deadweight on consumer spending and inflation. The local dollar edged up only a touch to $0.7892 as the report was not nearly strong enough to make a rise in interest rates any more likely this year.

Wednesday's figures from the Australian Bureau of Statistics showed its wage price index rose 0.6 percent in the December quarter, from the previous quarter, just topping market forecasts of a 0.5 percent increase.

Annual wage growth firmed to 2.1 from 2.0 percent, but was only just above the all-time trough of 1.9 percent and barely ahead of consumer price inflation. Even that owed much to an unusually generous 3.3 percent hike in the minimum wage which was forced on reluctant employers by the government regulator.

The RBA remained upbeat on the global economy in its February meeting minutes released yesterday, but focused on seeing further progress in reducing spare capacity the labour market, wage growth and inflation domestically. The RBA forecasts: GDP a little above 3 percent over both 2018 and 2019; unemployment to decline to 5-1/4 percent; core inflation to increase gradually to around 2-1/4 percent  by mid-2020. 

Meanwhile, the S&P/ASX 200 index traded 0.42 percent higher at 5,901.50 by 01:35 GMT, while at 01:00GMT, the FxWirePro's Hourly AUD Strength Index remained neutral at 19.16 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex

FxWirePro launches Absolute Return Managed Program. For more details, visit http://www.fxwirepro.com/invest

  • Market Data
Close

Welcome to EconoTimes

Sign up for daily updates for the most important
stories unfolding in the global economy.