Australian bonds gain tracking U.S. Treasuries as trade war fears linger on; eyes on RBA’s monetary policy decision

Australian bonds gained during Asian session Thursday tracking similar movement in the United States counterpart as trade war fears continued to linger on ahead of the Reserve Bank of Australia’s (RBA) monetary policy meeting, scheduled to be held by early next week.

The yield on Australia’s benchmark 10-year Note, which moves inversely to its price, slipped nearly 1 basis point to 2.63 percent, the yield on the long-term 30-year Note plunged nearly 4 basis points to 3.09 percent and the yield on short-term 2-year traded nearly 2 basis points lower at 2.00 percent by 04:40 GMT.

Trade disputes continued to rattle investor sentiment around the world on Wednesday. President Donald Trump threatened a 20 percent tariff on all car imports from the EU last week, adding that if the EU chose not to remove its duties on American vehicles, then the U.S. would have no choice but to act on those levies.

Further, a senior official from the State Department told reporters that businesses that purchase Iranian crude oil must cut those exports entirely by the beginning of November — or face sanctions.

Meanwhile, the S&P/ASX 200 index traded 0.08 percent higher at 6,141.5 by 04:50 GMT, while at 03:00GMT, the FxWirePro's Hourly AUD Strength Index remained highly bearish at -118.11 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex