Aust bonds rebound after selloff

Australian bond futures are stronger as investors take advantage of lower prices following Thursday's selloff.

JP Morgan interest rate strategist Sally Auld said bond prices were more attractive to investors following the sharp falls seen following the release of Australian jobs data.

"Three year bond yields are 20 points above the cash rate, which looks pretty attractive if you're not expecting the RBA (Reserve Bank of Australia) to tighten interest rates any time soon," she said.

Figures released on Thursday by the Australian Bureau of Statistics show total employment grew by 71,500 in February, the strongest jobs growth in over a decade.

The RBA kept the cash rate on hold at 3.0 per cent in February and March and the jobs figures reduced expectations it will cut the rate in the next few months.

With no major economic data expected on Friday, Ms Auld said the local bond market was likely to remain quiet.

"It's hard to get too bearish at these levels so I'm not sure that a lot's going to happen today," she said.

"But more broadly I'd expect to see decent support for the market at these sorts of levels."

At 0830 AEDT on Friday, the March 10-year bond futures contract was trading at 96.350 (implying a yield of 3.650 per cent), up from Wednesday's local close of 96.335 (3.665 per cent).

The March three-year bond futures contract was at 96.845 (3.155 per cent), up from 96.835 (3.165 per cent) previously.

Market Data

  • Currencies
    Currencies
    NamePriceChange% Chg
    0.9326-0.0001-0.01%
    AUDUSD=X
    0.5556+0.0002+0.04%
    AUDGBP=X
    0.67520.000.00%
    AUDEUR=X
  • Commodities
    Commodities
    NamePriceChange% Chg