Australian bonds slump after China’s CPI sharply beats estimates in August; investors eye August employment report

The Australian bonds slumped Monday after China’s consumer price-led inflation index for the month of August beat market expectations, sharply jumping during the period, with a broader rise in the country’s producer price index for the same period. Australia is the biggest commodity importer of China.

The yield on the benchmark 10-year Treasury note, which moves inversely to its price, jumped 5-1/2 basis points to 2.62 percent, the yield on 15-year note also surged 5-1/2 basis points to 2.92 percent and the yield on short-term 2-year traded nearly 3-1/2 basis points higher at 1.88 percent by 03:00 GMT.

China’s consumer inflation rate accelerated more than expected to 1.8 percent in August from a year earlier, the National Bureau of Statistics said on Saturday, the first uptick in three months. The consumer price index (CPI) had been expected to have risen 1.6 percent on-year compared with an increase of 1.4 percent in July.

Producer price inflation also accelerated more than expected in August, gaining speed for the first time in six months. The producer price index (PPI) rose 6.3 percent from 5.5 percent in July. Analysts polled by Reuters had predicted the PPI would rise 5.6 percent in August on an annual b

Meanwhile, the ASX 200 index jumped 0.80 percent to 5,713.50 by 03:05GMT, while at 03:00GMT, the FxWirePro's Hourly AUD Strength Index remained neutral at -14.90 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex

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