Australian bonds slide tracking U.S. counterpart post weak demand at 10-year auction

The Australian bonds slid Thursday, tracking weakness in the U.S. Treasuries after the overnight 10-year note auction was welcomed with weak demand. Markets will now look forward to the Reserve Bank of Australia (RBA) Governor Philip Lowe’s speech, scheduled to be held today by 23:30GMT for further direction in the bond market.

The yield on the benchmark 10-year Treasury note, which moves inversely to its price, rose nearly 1 basis point to 2.65 percent, the yield on 15-year note also climbed nearly 1 basis point to 2.96 percent while the yield on short-term 2-year traded flat at 1.81 percent by 03:50 GMT.

A USD23 billion auction of 10-year US Treasuries was met with lacklustre demand on Wednesday, as investors shied away from buying the country’s sovereign debt with a yield near its lowest level of the year.

The bid-to-cover ratio at the auction, a measure of investor demand, fell to 2.23 from 2.45 at a July 10-year Treasury sale. It was the lowest bid-to-cover ratio since the aftermath of the US election last November.

Meanwhile, the S&P/ASX 200 index traded 0.04 percent lower at 5,702.50 by 04:00 GMT, and the FxWirePro's Hourly AUD Strength Index remained neutral at -66.75 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex

FxWirePro launches Absolute Return Managed Program. For more details, visit http://www.fxwirepro.com/invest