Australian bond futures rose on Wednesday due to weakness in regional stock markets after falls on Wall Street and in anticipation of a softer labour force report on Thursday. Local market price gains came despite data showing consumer confidence rising to its highest level in over 10 years and a large jump in job vacancies. March 10-year bond futures touched Fibonacci resistance and their highest level since December 29 at 94.725, before finishing 5.5 basis points higher at 94.715.
The high represents a 61.8 percent retracement of the sell-off from a 29-month high of 94.890 on December 9 to a six-week low of 94.460 on January 5.
The January Westpac-Melbourne Institute consumer sentiment index rose 4.2 percent to 123.5, just shy of the record high of 124.9 seen in June 1994.
"The series stands in marked contrast to the persistent slowdown in retail sales, which with each successive reading is looking more like a trend and less like statistical noise," said Michael Every, senior economist at RBC Capital Markets.
"The gap between the two ... should ultimately close, and the Reserve Bank of Australia (RBA) and market will be looking closely to see in which direction," he said.
November retail sales reported earlier this week rose just 0.1 percent after unexpected weakness in previous months, although anecdotal evidence suggests retailers saw a bumper Christmas-New Year period.
Job vacancies jumped 17.2 percent in the three months to November, rebounding from a revised 8.9 percent fall in the three-months to August.
December labour force data on Thursday is expected to show the unemployment rate rising to 5.3 percent, up from the 5.2 percent in November, which matched the record low in 1977.
The median forecast for employment is for a rise of just 4,000 after about 135,000 hirings in the previous three months, although economist predictions for December show a wide range.
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