Australian bonds trade narrowly mixed ahead of RBA monetary policy decision

Australian bonds traded narrowly mixed on Monday as investors await the Reserve Bank of Australia (RBA) monetary policy decision scheduled for March 6.

The yield on the benchmark 10-year Treasury note, which moves inversely to its price, fell 1 basis point to 2.723 percent, the yield on the long-term 30-year note rose 1/2 basis point to 3.350 percent and the yield on short-term 2-year down 1 basis point to 1.965 percent by 02:50 GMT.

The Reserve Bank Board meets next week on March 6 and we expect there will be no change in the overnight cash rate. We also do not expect to see any significant change in the Governor’s rhetoric from last month.

In the United States, U.S. government debt yields rose Friday after President Donald Trump's tariff announcement sparked fear of a trade war and more robust inflation. Fears of stronger inflation as a result of higher materials prices and foreign retaliation sent yields up across the board Friday.

The United States is expected to set tariffs of 25 percent when it comes to steel and 10 percent for aluminum, which could emerge as soon as next week and put pressure on companies both domestically and internationally.

Meanwhile, the S&P/ASX 200 index traded 0.56 percent lower at 5,875.5 by 03:10 GMT, while at 03:00GMT, the FxWirePro's Hourly AUD Strength Index remained neutral at -51.13 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex

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