Australian bond yields plunge amid U.S.-China trade talks; RBA keeps steady despite signs of economic slowdown

Australian government bond yields during Asian trading session Tuesday tracking a similar movement in the U.S. Treasuries even as trade talks between the United States and China are nearing an end towards a mutual agreement.

Further, the Reserve Bank of Australia (RBA), in its monetary policy meeting, concluded today, kept benchmark interest rates on hold despite signs of a serious economic slowdown

The yield on Australia’s benchmark 10-year note, which moves inversely to its price, slumped 3 basis points to 2.157 percent, the yield on the long-term 30-year bond plunged 3-1/2 basis points to trade at 2.716 percent and the yield on short-term 2-year traded nearly 2 basis points lower at 1.737 percent by 04:10GMT.

The RBA’s steady policy decision comes ahead of the country’s Q4 2018 gross domestic product (GDP) data, scheduled to be released by the Australian Bureau of Statistics on March 6 by 00:30GMT. The central bank last moved interest rate down in August 2016 to 1.5 percent and has seen remained at that level.

The Bank also adopted a neutral stance on rates, signalling that the next move could be up or down, a departure from its previously stated desire to raise rates.

The economy’s current dwindling situation – a continuous fall in housing prices, weakness in consumer sentiments, timid growth in wages and disappointment in the construction sector has instilled fears of a sharp downturn in the economy.

Meanwhile, the S&P/ASX 200 index traded tad higher at 6,184.50 by 04:20GMT, while at 04:00GMT, the FxWirePro's Hourly AUD Strength Index remained neutral at -42.36 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex