Australia 10-year bond yield hit highest since October on upbeat November retail sales data

Australian government bonds plunged on Thursday following higher-than-expected retail sales data for November. Also, weakness in the U.S. Treasuries pushed the bond yields higher.

The yield on the benchmark 10-year Treasury note, which moves inversely to its price, rose 1-1/2 basis points to 2.717 percent, the yield on the long-term 30-year note jumped 2-1/2 basis points to 3.429 percent and the yield on short-term 2-year climbed 2-1/2 basis points to 2.062 percent by 03:30 GMT.

Australian retail sales jumped past all expectations in November as consumers splashed out on Apple iPhones and Black Fridaypromotions, a major boost for an economy that had been struggling with sluggish spending. Today's figures from the Australian Bureau of Statistics showed retail sales rose 1.2 percent in November from October, when they rose a solid 0.5 percent. That was three times the market forecast and the steepest gain since early 2013.

In the United States, Treasuries saw further downward pressure across the curve on Wednesday, during a relatively quiet session punctuated by mixed economic data. With respect to data, markets received weaker than expected import prices for December, contrasted by considerable gains in wholesale inventories for November.

These releases were followed later by a well-received 10-year Note auction that provided modest upward pressure to the complex. In terms of speakers, markets received commentary from Chicago Fed President Evans, Dallas Fed President Kaplan and St. Louis Fed President Bullard, all of whom largely stuck to their previously established lines of thinking, largely highlighting concerns with respect to inflation.

Markets now look ahead to a greater flow of data in the U.S, highlighted by producer prices, jobless claims and Treasury budget statement releases, accompanied by a 30-year Bond auction in the early afternoon.

Meanwhile, the S&P/ASX 200 index traded 0.51 percent lower at 6,008.5 by 03:30 GMT, while at 03:00GMT, the FxWirePro's Hourly AUD Strength Index remained highly bearish -134.17 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex

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