bonds weaker ahead of budget

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    Bonds weaker ahead of Budget
    May 10, 2005
    From: AAP


    THE Australian bond market opened marginally weaker as traders looked for possible clues in tonight's federal budget about the future state of the economy.
    At 9.00am (AEST) the yield on the Commonwealth Government April 2015 bond was at 5.410 per cent from 5.410 at yesterday's close, while the yield on the August 2008 bond was 5.315 from 5.300.

    On the Sydney Futures Exchange the June 2005 10-year bond futures contract price was at 94.575 from yesterday's close of 94.580, while the three-year contract was at 94.66 from 94.68.

    CitiGroup economist Shane Lee said the US bond market lost some ground on the back of equity market gains with some very subdued effects felt on the Australian market.


    "Yields at the long end of the Aussie bond market should open around little changed from yesterday's close," Mr Lee said.

    National Australian Bank (NAB) analysts said there was little news domestically to jolt the market significantly either way but that tonight's federal budget would give traders possible clues about the future financial climate.

    "Tonight's federal budget will not be market moving but it is nonetheless a useful document as it sets the economic agenda and environment for the next year," the NAB said.

    "Points to watch in tonight's federal budget will be the government's economic parameters – they will likely cut their growth forecasts – and the degree of extra stimulus, particularly coming from tax cuts."
 
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