Aussie bonds start flat on further US Fed intervention on the American economy
With the US unemployment rate steadying at more than nine percent and as investors fidget while anxiously waiting for the October board meeting minutes of the US Federal Reserve, the Australian bond market coursed through a flat start on Monday's opening.
By 0830 on the Sydney Futures Exchange, the December 10-year bond futures contract slid from 94.980 (with an implied yield of 5.020 percent) to 94.975 (5.025 percent) while the December three-year bond futures contract dipped from 95.080 (4.920 percent) to 95.070 (4.930 percent).
Analysts noted that the market saw minimal action as investors monitor the expected release on Tuesday of the Federal Reserve's board meeting minutes by its policy making unit, the Federal Open Market Committee (FOMC).
No substantial movements in the market could be expected pending the release of the minutes, according to ICAP economist Adam Carr, as he noted that the employment figures furnished last Friday by the US Labor Department sparked some amount of rally with the market assertion that the US Feds would be printing more money.
The Friday job data showed that new claims for unemployment benefits improved by up to two percent to 445,000 with the unemployment rate firming up at 9.6 percent that analysts said was largely influenced by the second round of quantitative easing initiatives by the US Federal Reserve.
The Federal Reserved opted to maintain its cash rate at 0.25 percent in September but it did not rule out the possibility of purchasing more US treasuries to ramp up the money circulation in the economy, which is the Fed's usual tactic during economic downturns such as its practice at the height of the recent global financial crisis.
The Australian Bureau of Statistics (ABS) is expected to publish the country's August data for housing finance, which experts said should register a spike of one percent on home loan numbers in the month.
However, Mr Carr is pessimistic that the new data would trigger any movements on the bond market unless the figures would considerably exceed market projections.
