Australian bonds plunge on slight improvement in risk appetite ahead of RBA meeting minutes

Australian government bonds plunged during Asian session Monday as investors’ risk appetite improved slightly ahead of the Reserve Bank of Australia’s (RBA) monetary policy meeting minutes, scheduled to be released on April 16 by 01:30GMT.

The yield on Australia’s benchmark 10-year note, which moves inversely to its price, jumped nearly 6 basis points to 1.945 percent, the yield on the long-term 30-year bond surged 4-1/2 basis points to 2.567 percent and the yield on short-term 2-year traded 3 basis points higher at 1.529 percent by 04:00GMT.

Global risk sentiments should kickstart the week on a relatively firm tone amid what portends to be a busy but Easter holiday-shortened week ahead. The S&P500 rallied while the UST bonds (with the 10-year yield at 2.57 percent) and the USD slipped on Friday amid upbeat earnings from JPMorgan, OCBC Treasury Research reported.

US President Trump also renewed his criticism of the Fed, saying that “the stock market would be 5000 to 10,000” points higher if not for the Fed rate hikes. The ongoing IMF-World Bank meetings warned that the global economy is at a delicate moment with very high uncertainty and at risk of self-inflicted wounds, albeit ECB president Draghi argued the Eurozone has “remarkable resilience” and UK Chancellor Hammond opined a Brexit agreement could be struck within weeks.

On the US-China trade talks, Treasury secretary Mnuchin said that US is open to facing “repercussions” if it does not live up to its commitments and “we’re hopefully getting very close to the final round of these issues”, the report added.

Meanwhile, the S&P/ASX 200 index traded tad 0.15 percent lower at 6,226.50 by 04:10GMT, while at 03:00GMT, the FxWirePro's Hourly AUD Strength Index remained slightly bullish at 78.43 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex