Australian government bonds plunged Monday following weakness in the U.S. Treasuries as investors reduced bond holdings on worries about more inflation and federal borrowing after the U.S. Senate passed a budget blueprint.
The yield on the benchmark 10-year Treasury note, which moves inversely to its price, rose more than 2 basis points to 2.809 percent, the yield on the long-term 30-year note also climbed 2-1/2 basis points to 3.573 percent and the yield on short-term 2-year traded nearly 1 basis point higher at 1.950 percent by 02:40GMT.
U.S. Treasury yields rose on Friday, with two-year yields reaching a near nine-year high, as investors reduced bond holdings on worries about more inflation and federal borrowing after the U.S. Senate passed a budget resolution, Reuters reported.
The move late Thursday raised expectations the Republican-controlled Congress and U.S. President Donald Trump would be able to enact their tax-cut package, which would widen the federal deficit by up to $1.5 trillion over the next decade.
Last week, Australia’s unemployment rate has fallen to 5.5 percent, official figures show, beating market expectations. The total number of people with jobs rose by 19,800 in September compared with the previous month, the Australian Bureau of Statistics said today. Full-time employment rose by 6100, while the number of new part-time employees was up 13,700. The participation rate, broadly covering the number of people employed or actively looking for work, was steady at 65.2 percent.
Meanwhile, the S&P/ASX 200 index fell 0.06 percent to 5,890.50 by 02:40 GMT, while at 02:00GMT, the FxWirePro's Hourly AUD Strength Index remained neutral at -36.58 (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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