Volatile week for the Australian bonds caps by a firmer start on Friday
The market saw a firmer opening for the Australian bonds as analysts said investors were keen on waiting for the anticipated US employment figures where up to 5000 more jobs were to be added on non-farm sectors.
As of 0830 AEDT o Friday, the December 10-year bond futures contract on the Sydney Futures Exchange surged from 94.925 (carrying an implied yield of 5.075 percent) to 94.90 (5.070 percent) while the December three-year bond futures contract moved up from 95.020 (4.980 percent) to 95.030 (4.970 percent).
JP Morgan rate strategist Ally Auld observed that the bonds have so far showed volatile movements for the entire week, noting that a considerable rally marked the rate hold policy made by the Reserve Bank of Australia (RBA) in the middle of the week.
Those gains disappeared on substantial sell offs on Thursday night as the JP Morgan analyst stressed that bond movements were quite interesting since equities didn't fare any better, hinting that "it could have been some position squaring ahead of US pay rolls data tonight."
Investors immediately turned their attention on refuge assets such as the US dollar amidst the 0.18 percent decline suffered by the Dow Jones Industrial Average while the S&P 500 index was chipped away by 0.17 percent.
Ms Auld said that the gains achieved by the Australian bonds on RBA's decision to hold on to its current policy rate of 4.5 percent, the fifth consecutive month that the cash rate was left untouched, would not be nudged by the scheduled speech to be given by RBA deputy governor Ric Battellino in Brisbane on Friday.
She said that the RBA talk would have negligible impact on the market but not the September US job data set to be released on the same day as the unemployment rate in the United States worsened a bit further by 9.7 percent in the same period.