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Australian bonds suffer tracking U.S. Treasuries on hopes of successful Brexit deal; September labour report eyed

The Australian government bonds suffered during Asian trading session Wednesday tracking a similar movement in the United States’ Treasuries after hopes arose of a successful Brexit deal soon amid a calmer trade talk situation between the U.S. and China.

However, investors shall keep a close eye on Australia’s labour market report for the month of September, scheduled to be released on October 17 by 00:30GMT, for further direction in the debt market.

The yield on Australia’s benchmark 10-year note, which moves inversely to its price, jumped 3-1/2 basis points to 1.048 percent, the yield on the long-term 30-year bond surged nearly 4 basis points to 1.636 percent and the yield on short-term 2-year traded nearly 2 basis points higher at 0.722 percent by 04:20GMT.

Brexit optimism prompted GBP higher on hopes that EU and UK leaders are closing in on a deal ahead of the EU Council meeting tomorrow. The S&P500 rallied to four-week highs overnight on earnings optimism led by JPMorgan and Johnson & Johnson, whilst UST bonds also skidded with the 2- and 10-year yields up to 1.62 percent and 1.77 percent respectively, OCBC Treasury Research reported.

However, global risk sentiments may be off to a shaky start today after the IMF downgraded its global growth forecast for the fifth straight time by 0.2 percentage point to 3 percent for 2019 and by 0.1 percentage point to 3.4 percent for 2020, citing the familiar trade tensions, the report added.

Meanwhile, the S&P/ASX 200 index traded tad 0.43 percent higher at 6,712.50 by 04:25GMT.

By Debarati Bir
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