The Australian bonds gained Thursday after the yield on 10-year U.S. Treasuries fell five basis points to 2.17 percent, the lowest closing level since June 26. Also, the markets wary ahead of the Federal Reserve’s Jackson Hole Economic Policy Symposium scheduled for this Friday in Wyoming.
The yield on the benchmark 10-year Treasury note, which moves inversely to its price, fell more than 3 basis points to 2.656 percent, the yield on 15-year note slid nearly 4 basis points to 2.951 percent and the yield on short-term 2-year dipped nearly 2 basis points to 1.837 percent by 03:40 GMT.
The U.S. President Donald Trump’s latest remarks, which included talk of ending the North American Free Trade Agreement and he threatened the prospect of a US government shutdown in the battle to fund the construction of a wall between the US and Mexico boosted demand for the safe-haven assets. Also, the rekindled speculation the administration will struggle to deliver on its fiscal plans and heightened unease about the future of global trade supported the bond prices.
On the other hand, there are some expectations Federal Reserve Chair Janet Yellen could highlight the need to keep a watchful eye on risks to inflation goals and financial stability at the Jackson Hole meeting. However, the outlook is more or less consistent with a report from Reuters last week that detailed two unnamed sources' expectations that Draghi will not deliver a new stance on the state of monetary policy.
Also, the markets were jittery after the start of annual military exercises by South Korean and U.S. forces angered North Korea, which denounced the joint drills as a step toward nuclear war.
Meanwhile, the S&P/ASX 200 index traded 0.30 percent higher at 5,719.5 by 03:40 GMT, while at 03:00GMT, the FxWirePro's Hourly AUD Strength Index remained neutral at -8.61 (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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