Aust bonds weaker as US data improves
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Australian bond futures prices are lower in line with weaker US Treasury bonds as the American economy shows more signs of an economic recovery.
UBS interest rate strategist Matthew Johnson said Australian bond futures prices had fallen through some key support levels as the green shoots of the the American economy encouraged investors move into riskier assets.
"The problem for our bond market is the US Treasury market is selling off, and that's because the US data doesn't look too bad," Mr Johnson said.
"If the US data keeps looking good and Treasuries keep selling off, then we're going to continue higher in yield (lower in price)."
US economic figures released during the offshore session on Friday night showed monthly job growth averaged 181,000 in 2012, well above the prior estimate of 153,000 jobs.
At 1630 AEDT on Monday, the March 10-year bond futures contract was trading at 96.435 (implying a yield of 3.565 per cent), down from 96.500 (3.500 per cent) on Friday.
The March three-year bond futures contract was at 97.050 (2.950 per cent), down from 97.130 (2.870 per cent).
Locally, it is a busy week of economic events with the highlights being the Reserve Bank of Australia's board meeting on Tuesday, at which the cash rate is expected to stay three per cent and January jobs figures on Thursday.
Mr Johnson expects the Australian bond market to continue to be influenced by US economic developments and movements in the US bond market.