Australian bonds tad up in silent session tracking U.S. Treasuries amid decline in S&P500

Australian bonds remained tad higher on Tuesday tracking a similar movement in the United States’ Treasuries amid a silent trading session that witnessed data of little economic significance. However, the S&P500 index decline in the overnight session as concerns over the spread of the deadly coronavirus threatened market sentiments.

The yield on Australia’s benchmark 10-year note, which moves inversely to its price, declined nearly 1 basis point to 0.919 percent, the yield on the long-term 30-year bond remained tad 1/2 basis point down at 1.506 percent and the yield on short-term 2-year too dipped 1/2 basis point to 0.655 percent by 05:00GMT.

Another risk off session appears to be on the cards today after the overnight Wall Street slump amid growing fears about the spread of covid-19 in South Korea and Italy, OCBC Treasury Research reported.

The S&P500 saw its largest decline since February 2018, whilst UST bonds rallied further with the 10-year yield testing 1.35 percent intra-day before closing at 1.37 percent even though US Treasury secretary Mnuchin opined that the covid-19 is unlikely to have a material impact on the Phase 1 trade deal, the report added.

Meanwhile, the S&P/ASX 200 index traded tad 0.57 percent higher at 6,824.50 by 05:05GMT.