The Australian government bond yields plummeted during Asian session of the first trading day of the week Monday as fears of a global economic recession continued to cloud investors’ risk appetite. Also, Fed Chair Jerome Powell’s speech at the Jackson Hole Symposium on Friday did little to help the debt market.
The yield on Australia’s benchmark 10-year note, which moves inversely to its price, plunged nearly 2 basis points to 0.889 percent, the yield on the long-term 30-year bond slumped 7 basis points to 1.531 percent and the yield on short-term 2-year plummeted 6 basis points to 0.699 percent by 05:15GMT.
Global markets were rocked on Friday after US President Donald Trump raised existing and planned tariffs on China, as the latter announced that it will be imposing new tariffs on $75bn worth of US goods and resume duties on US auto and auto parts, OCBC Treasury Research reported.
This escalation of the trade war dwarfed the much-hyped Jackson Hole symposium, in which numerous central bank chiefs voiced the limitations of monetary policy in the current environment, the report added.
"At the onset of the week, expect safe havens like the CHF and JPY (including XAU and US Treasuries) to remain resilient across the board. While the USD may also be vulnerable with respect to the EUR, expect the antipodeans to underperform as growth worries accumulate (note the US3/30s are now threatening to invert)," OCBC commented in a separate report.
Meanwhile, the S&P/ASX 200 index edged tad -0.23 percent lower to 6,383.50 by 05:20GMT.


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