bonds open firmer ahead of rba rate decision

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    Aust bonds open firmer ahead of RBA rate decision
    AAP News
    9:07:020 2/02/2005
    SYDNEY, Feb 2 AAP - Australian bond prices opened firmer today
    ahead of a decision on interest rates this morning by the Reserve
    Bank of Australia (RBA).
    At 0900 AEDT the yield on the Commonwealth Government April 2015
    bond was at 5.350 per cent from 5.380 per cent at yesterday's close
    and the yield on the August 2008 bond was at 5.275 from 5.285.
    On the Sydney Futures Exchange, the March 2005 10-year bond
    futures contract price was at 94.635 from 94.610 and the three-year
    contract was unchanged at 94.71.
    The RBA will announce its decision on interest rates at 0930
    AEDT, with most expecting the cash rate to remain at 5.25 per cent
    for at least another month.
    National Australia Bank said while the debate was building about
    the path for the RBA cash rate and the Fed funds rate through the
    course of 2005, expectations this week were quite firm.
    "The RBA is almost certain to leave the cash rate unchanged at
    5.25 per cent today," NAB strategists said.
    "The US Fed will almost certainly announce another 25 basis
    points hike in the funds rate, to two per cent, tomorrow morning
    Asian time.
    "We also expect them to leave the language and bias in the
    statement unchanged from December."
    US Treasuries eased slightly overnight as investors showed their
    reluctance to take up firm positions ahead of the US Federal
    Reserve's (Fed) interest rate decision tomorrow morning and key US
    jobs data on Friday night.
    The bond market largely shrugged off a mild pullback in US
    manufacturing growth, trading in a subdued session overnight.
    Citigroup director and strategist Stephen Halmarick said
    overnight money markets were waiting for the US rate decision,
    Friday's jobs data for January and the weekend Group of Seven (G7)
    finance ministers meeting in London.
    "In the US Treasury bond market, yields were little changed at
    either end of the curve ahead of the Fed's decision," he said.
    "Trading overnight has seen both local markets (Australian and
    New Zealand) gain a little further ground ... with the focus on
    both the US and domestic official interest rate expectations."

    DEBT TABLE - Market snapshot taken at 0900 AEDT
    SECURITY YIELD PREVIOUS CLOSE
    CGS Apr 6.25 pct 2015 5.350 5.380
    CGS Aug 8.75 pct 2008 5.275 5.285
    90-day bank bill rate 5.485 5.475
    180-day bank bill rate 5.575 5.565

    Sydney Futures Exchange
    CONTRACT PRICE PREVIOUS CLOSE
    March 2005 10-yr bond futures 94.635 94.610
    March 2005 3-yr bond futures 94.710 94.710
    March 2005 bill futures 94.480 94.490
    June 2005 bill futures 94.410 94.410
 
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