Bond prices rise on Yellen speech

Australian bond futures prices have rallied on the back of Friday’s speech by US Federal Reserve chair Janet Yellen.

“US bond yields fell (prices rose) after Fed chair Yellen’s speech, which was similar in tone to the Federal Open Market Committee,” St George senior economist Jo Horton said.

“(Dr) Yellen said the Fed may well raise interest rates this year, and that subsequent increases will be gradual.”

At 0830 AEDT, the June 2015 10-year bond futures contract was trading at 97.625 (implying a yield of 2.375 per cent), up from 97.595 (2.405 per cent) on Friday.

The June 2015 three-year bond futures contract was at 98.290 (1.710 per cent), up from 97.270 (2.730 per cent).

KEY MOVEMENTS:

Government bond and bank bill yields:

* CGS 4.75 pct July 2017, 1.777% unchanged from Friday

* CGS 2.75 pct April 2024, 2.353% unchanged

Sydney Futures Exchange prices:

* June 2015 bill futures, 97.970 unchanged

* September 2015 bill futures, 98.080 unchanged

(*Closes taken at 1630 AEDT previous local session)

Source: IRESS

S&P Futures

spfutures.org@imediaone.com

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