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Australian bonds slump on upbeat building approvals data, retail sales in focus

Australian government bonds slumped on Tuesday following upbeat building approvals data. Also, strong risk sentiments moved away investors from safe-haven buying.

The yield on the benchmark 10-year Treasury note, which moves inversely to its price, rose 3 basis points to 2.650 percent, the yield on the long-term 30-year note jumped 2 basis points to 3.346 percent and the yield on short-term 2-year climbed 3 basis points to 2.019 percent by 03:50 GMT.

Australia approvals for the construction of new homes jumped by a surprise 11.7 percent in November, driven by a spike in apartment and townhouse building in Melbourne. The increase in high-density building in the Victorian capital meant overall approvals comfortably beat market expectations of a 1.0 percent decline.

In the United States, Treasuries held relatively steady to open the week during a relatively quiet session light on data of great significance. On the data front, markets saw considerable gains in consumer credit, (increasing +$28.0bln in November, bolstered by solid gains in both revolving and non-revolving activity).

With respect to Fed speakers, markets received commentary from a number of sources. Providing a dovish angle, Atlanta Fed President Bostic said that he remained supportive of the Fed continuing along its gradual path, though cautioned it should not necessarily come in the form of 3-4 rate hikes per year.

Markets now look ahead to a relatively quiet session on Tuesday, highlighted by NFIB small business optimism and JOLTs bob openings, followed later by a 3-year Note auction.

Meanwhile, the S&P/ASX 200 index traded 0.17 percent higher at 6,100.5 by 03:50 GMT, while at 03:00GMT, the FxWirePro's Hourly AUD Strength Index remained neutral at 41.37 (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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