USA - Bernanke

Bernanke spoke on Friday acknowledging growth in the USA faced some risks. He stopped short of announcing additional measures to stimulate the economy through quantitative easing (QE) - ie buying bonds in the market. Consequently the bond market there sold off with the 10 year bonds moving up a significant 17 bps re-tracing some of the move of the last few weeks. In Australia I'm led to believe we are seeing solid purchasing demand from central banks around the world for our AAA rated government bonds. This is likely to see our yields staying on the low side and the yield curve retaining it's flat shape for some time. There is also some talk of longer yields moving through the cash rate rendering our curve in an inverse shape.

In Australia there is quite a bit of data to be released with GDP due out on Wednesday.