Australian bonds surge ahead of RBA Governor Lowe’s speech

Australian government bonds surged during Asian session of the second trading day of the week Tuesday amid a muted trading session that witnessed data of little economic significance ahead of the Reserve Bank of Australia’s Governor Philip Lowe’s speech, scheduled to be held on July 25 by 03:05GMT.

The yield on Australia’s benchmark 10-year note, which moves inversely to its price, slumped nearly 2 basis points to 1.321 percent, the yield on the long-term 30-year bond also suffered 2 basis points to 1.956 percent and the yield on short-term 2-year traded nearly flat at 0.957 percent by 04:40GMT.

Wall Street climbed yesterday as Halliburton’s Q2 profit beat analyst estimates, while the 10-year UST bond yield was little changed at 2.05 percent amid the lack of fresh market catalysts in the form of Fed rhetoric or important US economic data releases as market players are still anticipating the upcoming US corporate earnings and the ECB policy meeting later this week, OCBC Treasury Research reported.

Asian markets may trade with a slightly firmer tone this morning with US president Trump announcing that a deal to extend the debt ceiling has been struck. This may avert any possibility of another government shutdown or the US Treasury Department running out of cash, albeit the House has to approve the agreement this week and Senate needs to vote by next week, the report added.

Meanwhile, the S&P/ASX 200 index remained tad 0.27 percent higher at 6,657.50 by 04:45GMT.