Australian bonds slump as sell-off continues amid hopes of rise in Q4 CPI

Australian government bonds slumped Tuesday as the global debt sell-off continued amid hopes of a rise in the country’s fourth-quarter consumer price inflation data, which is scheduled to be released on January 31 by 00:30GMT. The U.S. counterpart also reflected similar movements ahead of Wednesday’s interest rate decision from the Federal Reserve. 

The yield on the benchmark 10-year Treasury note, which moves inversely to its price, jumped 1-1/2 basis points to 2.84 percent, the yield on the long-term 30-year note also surged nearly 1-1/2 basis points to 3.46 percent and the yield on short-term 2-year remained tad higher at 2.09 percent 04:30GMT.

U.S. Treasury yields climbed to fresh multi-year highs in European trade on Monday, extending rises seen last week as investors braced for major central banks to step back from ultra-easy monetary policies.

The last quarter inflation data is widely expected to gain 0.7 percent q/q, higher the third-quarter reading of 0.6 percent q/q. On a yearly basis, it is anticipated to come at 2 percent y/y, up from previous 1.8 percent y/y. This upbeat data should give the Reserve Bank of Australia (RBA) little relief on the inflation front, also, booting expectations of an interest rate hike by end of this year.  

Meanwhile, the S&P/ASX 200 index traded 0.27 percent lower at 5,967.5 by 04:35 GMT, while at 04:00GMT, the FxWirePro's Hourly AUD Strength Index remained neutral at 49.42 (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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