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AAP

2012-12-10

Australian bond futures prices remain lower, following strong employment figures in the US.

At 1630 AEDT on Monday, the December 10-year bond futures contract was at 96.930 (implying a yield of 3.070 per cent), down from 96.955 (3.045 per cent) on Friday.

The December three-year bond futures contract was trading at 97.370 (2.630 per cent), down from 97.400 (2.600 per cent).

JP Morgan interest rate strategist Sally Auld said the bond market had started off weaker on Monday, following the release of improved US employment data over the weekend.

"We opened lower in price, and equity markets were strong, which supported that," she said.

On Friday, the US Labour Department reported that 146,000 jobs had been added to the market in November, showing a minimal impact from superstorm Sandy, which hit the country's east coast the previous month.

Ms Auld said bond prices regained some ground on Monday, following the release of weaker-than-expected national home loan data.

"People thought we'd see a trend of higher yields, but that didn't happen.

The number of home loans approved in October rose only 0.1 per cent from the previous month.

Economists had expected a rise of three per cent.

Ms Auld said strong performances on regional equity markets would likely put a cap on Monday's rally on bond prices.