Australian bonds sag tracking U.S. Treasuries as trade talks progress with China

Australian government bonds sunk during Asian session Tuesday, tracking a similar movement in the U.S. Treasuries following progress in the U.S.-China trade talks, coupled with healthy employment data last week.

The yield on Australia’s benchmark 10-year note, which moves inversely to its price, jumped 4-1/2 basis points to 2.323 percent, the yield on the long-term 30-year bond surged nearly 4 basis points to 2.819 percent and the yield on short-term 2-year traded 2 basis points to 1.900 percent by 03:50GMT.

"Trade talks between Chinese officials and their U.S. counterparts resumed early this week. According to Reuters, the Chinese foreign ministry said Monday that China and the U.S. have expressed an eagerness to work together. The ministry also added China stands ready to resolve trade disputes with the U.S. on equal footing," CNBC reported.

President Donald Trump said Sunday that the talks were going well and weakness in the Chinese economy gave Beijing an extra incentive to work toward a resolution, the report added.

Meanwhile, the S&P/ASX 200 index traded 0.63 percent higher at 5,664.5 by 03:55GMT, while at 03:00GMT, the FxWirePro's Hourly AUD Strength Index remained highly bullish at 113.81 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex