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Aust bonds weaker in quiet trade

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AAP

2013-08-13

The Australian bond market is weaker as the European and North American summer holiday period cause offshore trading volumes to be low.

Westpac senior market strategist Damien McColough said there was very little driving bond futures price changes.

"There's not a lot of volume going through," he said.

"There's some heaviness in the market due to lack of interest.

"Equity markets are strong and bonds are weak is the only link I can see."

At 1630 AEST on Tuesday, the September 10-year bond futures contract was trading at 96.245 (implying a yield of 3.755 per cent), down from 96.305 (3.695 per cent) on Monday.

The September three-year bond futures contract was at 97.380 (2.620 per cent), down from 97.420 (2.580 per cent).

Mr McColough said bond traders are awaiting the release of the Westpac/Melbourne Institute Survey of Consumer Sentiment, due out on Wednesday.

He said it would be of particular interest after the NAB monthly survey, which showed business conditions are a at four-year low and business confidence at its weakest in eight months.

The combined data may offer a hint on future interest rate movements by the Reserve Bank of Australia.