Government bonds likely to benefit less from ‘safe haven’ inflows going forward due to worries over valuation and volatility, says DNB Markets
UK gilts surge after August consumer price inflation disappoints investors; BoE’s policy decision in focus
Australian bonds slump as positive U.S. data aid markets, easing trade tensions provide modest support
Australian bonds mixed ahead of August employment report amid geopolitical tensions in the Middle East
New Zealand’s annual current account deficit narrows in Q2, net international liability position widens
China’s domestic activity continues to deteriorate in August, credit demand lacklustre amid uncertainty
Australian bonds jump tracking U.S. Treasuries as investors eye stimulus from major economies
The Australian government bonds jumped during Asian session Wednesday following investors’ improved appetite after global recession fears eased, tracking hopes of stimuli from major economies like China and Germany to support the ailing economies.
However, the downside in bond prices was capped by the Reserve Bank of Australia’s (RBA) hint at further monetary policy easing in its August meeting minutes, released early today.
The yield on Australia’s benchmark 10-year note, which moves inversely to its price, slumped 2-1/2 basis points to 0.930 percent, the yield on the long-term 30-year bond slipped 1/2 basis point to 1.545 percent while the yield on short-term 2-year traded 1-1/2 basis points lower at 0.734 percent by 05:00GMT.
Market caution set in overnight ahead of the upcoming FOMC minutes release, Fed chair Powell’s Jackson Hole symposium speech on Friday, and US president Trump’s signal that he’s not in a rush to get a trade deal with China. Trump also tweeted about the “crazy inverted yield curve” and called for Fed to "cut rates bigger and faster", OCBC Treasury Research reported.
RBA minutes released this morning remained dovish and suggested that “members would consider a further easing of monetary policy if the accumulation of additional evidence suggests this was needed to support sustainable growth”. Today’s economic data calendar comprises of US’ existing home sales, Thai trade data, and Singapore’s COE premium tender results, the report added.
Meanwhile, the S&P/ASX 200 index edged tad -0.29 percent lower to 6,434.50 by 05:05GMT.