Australian bonds rebound tracking firmness in U.S. Treasuries, ASX200 dips lower

The Australian bonds rebounded at the start of the week Monday, tracking firmness in the U.S. Treasuries and as investors moved away from riskier assets amid including equities and crude oil.

The yield on the benchmark 10-year Treasury note, which moves inversely to its price, plunged nearly 5 basis points to 2.74 percent, the yield on 15-year note also fell 4-1/2 basis points to 3.19 percent and the yield on short-term 2-year ticked 3 basis points lower to 1.82 percent by 05:10 GMT.

Asian stocks tumbled, after the United States President Donald Trump reigned in an aggressive immigration policy that restricts entry into the country for travellers from seven Muslim-majority nations. Large number protests hauled in response to this, after hundreds of people arriving at the U.S. airports were suspended entry from Syria, Iraq, Iran and four other countries on national security grounds.

The Australian bonds have been closely following developments in oil markets because of their impact on inflation expectations. Crude oil prices slipped in morning session, dragged down by signs of growing output in the U.S. that could partly offset output cuts by OPEC and other producers.

The International benchmark Brent futures moved lower 0.52 percent to USD55.41 and West Texas Intermediate (WTI) rose 0.49 percent to USD52.91 by 5:30 GMT.

Lastly, investors are now looking forward to the release of trade balance data next week, besides, the Reserve Bank of Australia’s first monetary policy of 2017, scheduled to be held on February 3 for further direction in the debt market.

Meawhile, the ASX200 index traded 0.57 percent down at 5,601.50 percent at 05:30GMT, while at 5:00GMT, the FxWirePro's Hourly AUD Strength Index remained neutral at -69.27 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex