Aussie drops below 73c, bond futures near 1-yr low

____AUSTRALIAN CREDIT/FOREX 12:05 P.M. (0205 GMT)_SNAPSHOT_____
FOREIGN EXCHANGE (against previous Sydney close)
0.7288/93 (0.7334/39)1.1697/18 (1.1913/40) 86.35/45 (86.57/67)    118.48/51 (118.01/06)0.6022/25 (0.6033/37)    1.2104/05
(1.2155/60)
 DEBT FUTURES                             CASH YIELDS 90-DAY
BILL (JUN) 94.21 (- 0.04) 5.67 (5.67) 3-YR
BOND   (JUN) 94.420(-0.050)  5.57 (5.54)
10-YR BOND  (JUN) 94.395(-0.045) 5.60 (5.57)
3/10 SPREAD  +02.5 (+03.0)   AUST/US 10-YR SPREAD   +61  (+64 )
S&P/ASX 200  5198.0 (5183.7) US10-YR    4.98 (4.92)
_________________________(April 13)____________________________

DATA* The Melbourne Institute Consumer Inflationary Expectations survey for April found the median expectation in the coming year was 4.8 percent, up from March's 4.6 percent. [ID:nSYD340252].

DEBT ISSUES* The Bear Stearns Companies Inc's eight-year Kangaroo bond has been priced and increased to A$450 million ($328 million) from an original A$400 million.The joint lead managers are Bear Stearns International Ltd, Commonwealth Bank of Australia and National Australia Bank. [ID:nSYD264832]

* Germany's KfW has had the A$200 million ($146 million) increase of its outstanding July 25, 2016 maturing Kangaroo bond priced. Sole lead manager IS RBC Capital Markets. [ID:nSYD343696] _______________________________________________________________

* The Australian dollar dropped below 73 U.S. cents on Thursday, weighed down by heavy selling against an unexpectedly resurgent kiwi dollar as expectations of a New Zealand recession receded.

* Data that revealed a surge in New Zealand retail sales in February forced interest rate markets to scale back expectations of a rate cut by the Reserve Bank of New Zealand, fuelling a near one U.S. cent rally in the kiwi to an intraday peak at $0.6250.

* The Aussie dollar ebbed within a $0.7271-$0.7338 range and dropped as low as NZ$1.1658 compared with earlier levels around NZ$1.1850, before retracing some of its losses on the illiquid cross to around NZ$1.17 by midday (0200 GMT).

* Still, there is solid support for the resource-rich Aussie dollar within a broad $0.7250-$0.7350 range, given ongoing strength for commodity prices .

* It has traded a $0.7255-$0.7344 range since April 6, also drawing support from growing expectations of a rate rise from the Reserve Bank of Australia later this year as the economy shows signs of acceleration.

* Bond futures continued to edge towards the one-year lows set earlier in the week after a soft performance in U.S. Treasuries, and as New Zealand futures reeled on data suggesting a NZ recession will be averted, putting a NZ rate cut on hold.

* NZ retail sales jumped 1.9 percent in February when forecasts had centred on a 0.3 percent increase.

* Australian consumer inflation expectations rose in April, adding to the negative tone. Inflationary expectations can themselves lead to higher inflation as workers demand higher wages in expectation of rising prices.

* Analysts said the Australian market is at risk of resuming a three-week slide in prices should the three-year bond futures contract sustain a breach below 94.470, or the U.S. 10-year note yield break and close above 5 percent.

Copyright © 2006 Reuters Limited. All rights reserved. Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of Reuters Limited

Copyright © 2006 Yahoo! Pte Ltd. All Rights Reserved.
Privacy Policy - Terms of Service - Community - Help