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Australian bonds jump tracking U.S. Treasuries ahead of trade talks with China

Australian government bonds jumped during Asian trading session Tuesday tracking a similar movement in the United States Treasuries amid a muted day that witnessed data of little economic significance as investors wait to watch the scheduled trade talks between President Donald Trump and Chinese leader Xi Jinping at the G-20 meeting in Osaka, Japan.

The yield on Australia’s benchmark 10-year note, which moves inversely to its price, slumped 2-1/2 basis points to 1.266 percent, the yield on the long-term 30-year bond plunged nearly 3-1/2 basis points to 1.878 percent and the yield on short-term 2-year slipped nearly 1 basis point to 0.900 percent by 05:00GMT.

S&P500 closed lower for the second session amid the heightened US-Iran tensions, while the 10-year UST bond yield dipped back to 2.01 percent and the USD softened ahead of Fed chair Powell’s speech to the Council on Foreign Relations on the challenges to the US economy, OCBC Treasury Research reported.

US Trade Representative Robert Lighthizer reportedly spoke to Chinese Vice Premier Liu He on Monday, as both sides prepare for their respective country leaders to meet in this week’s G20 summit, the report added.

Meanwhile, the S&P/ASX 200 index remained flat at 6,579.50 by 05:05GMT, while at 05:00GMT, the FxWirePro's Hourly AUD Strength Index remained neutral at 44.28 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex

By Debarati Bir
  • Market Data
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