Aust bonds sag on global equity rally
The Australian bond market has been pushed lower by a global sharemarket recovery.
A strong performance from Chinese stocks improved international sentiment, sending all major northern hemisphere bourses and commodities higher.
This reversed gains made in bond prices overnight following a softening US rate rise stance from a top Federal Reserve official.
Kansas City Fed President Esther George cautiously said that the timing of any rate rise should take into account potential market impacts, Westpac strategist Imre Speizer said.
“Fed fund futures are currently pricing around a 30 per cent chance of a rate hike in September, 100 per cent priced not until April,” he said
At 0830 AEST on Friday, the September 2015 10-year bond futures contract was trading at 97.235 (implying a yield of 2.765 per cent), down from 97.260 (2.740 per cent) on Thursday.
The September 2015 three-year bond futures contract was at 98.180 (1.820 per cent), down from 98.210 (1.790 per cent).
Government bond yields:
- CGS 5.5pct Jan 2018, 1.767pct, unchanged from Thursday
- CGS 4.25pct April 2026, 2.783pct, unchanged
Sydney Futures Exchange prices:
- September 2015 bill futures, 97.900, from 97.910
- December 2015 bill futures, 98.040, from 98.060,
(*Closes taken at 1630 AEST previous local session)