Australian bonds rally as investors shore-up demand following Trump uncertainties

The Australian bonds rallied Thursday as investors poured into safe-haven assets, following uncertainties over the United States President Donald Trump’s administration.

jumped mid-week Wednesday, tracking firmness in the U.S. counterparts amid a session that witnessed data of little economic significance. Also, the Reserve Bank of Australia’s (RBA) March monetary policy meeting minutes, released a day earlier, painted a mixed picture of the economy, adding sluggishness to market sentiments.

The yield on the benchmark 10-year Treasury note, which moves inversely to its price, slumped 2-1/2 basis points to 2.75 percent, the yield on 15-year note nose-dived nearly 2 basis points to 3.14 percent and the yield on short-term 2-year traded 1-1/2 basis points lower at 1.77 percent by 05:00 GMT.

Investors unwound carry trades while watching to see whether the President Trump can push through a healthcare bill, as failure could signal problems to come pursuing his economic agenda. Financial markets' immediate focus is on whether Trump can gather enough support at a vote later in the day to rollback Obamacare, one of his key campaign pledges.

Further, market participants remain worried that if the White House fails at this hurdle, progress on fiscal stimulus and tax cuts might be derailed. The jitters have hurt risk sentiment globally and undermined commodity prices, which is bad for Australia.

Meanwhile, the ASX 200 index traded 0.29 percent up at 5,701.50 by 05:20GMT, while at 05:00GMT, the FxWirePro's Hourly AUD Strength Index remained slightly bearish at -96.90 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex