Australian bonds gain on speculations of less-hawkish Fed successor Powell; U.S. 10-year yields down 3bps

Australian bonds gained Monday following firmness in the U.S. Treasuries as speculations increased over the appointment of less hawkish Federal Reserve Governor Jerome Powell.

The yield on the benchmark 10-year Treasury note, which moves inversely to its price, fell 6-1/2 basis points to 2.726 percent, the yield on the long-term 30-year note also declined 7 basis points to 3.490 percent and the yield on short-term 2-year slid 3 basis points to 1.854 percent by 02:30 GMT.

The U.S. Treasuries pushed higher across the curve driven higher early on following increased speculation that President Trump is leaning in the direction of appointing Fed Governor Powell as the replacement to current Fed Chair Yellen, a less hawkish consideration is following recent concerns that he was/is seriously considering John Taylor.

The U.S. 10-year Treasury yields fell 3 basis points to 2.405 despite Friday's higher-than-expected preliminary third-quarter GDP figure. In addition, the short-term 2-year bond yields declined 1 basis point to 1.595.

Markets now look ahead to the November FOMC statement on Wednesday, in which it is widely expected to deliver no change in the overnight rate.

Meanwhile, the S&P/ASX 200 index traded 0.27% lower at 5,905.5 by 02:30 GMT, while at 02:00GMT, the FxWirePro's Hourly AUD Strength Index remained neutral at -63.01 (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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