Australian bonds slightly gain despite fall in U.S. Treasuries as Iran tensions fade away

The Australian bonds gained slightly during Asian session of the second trading day of the week Tuesday despite a fall in the United States’ Treasuries in the overnight session amid slowdown in the Iranian tensions.

The yield on Australia’s benchmark 10-year note, which moves inversely to its price, hovered around 1.216 percent, the yield on the long-term 30-year bond gained nearly 1-1/2 basis points to 1.845 percent and the yield on short-term 2-year suffered 1 basis point to 0.794 percent by 02:55GMT.

Risk aversion subsided overnight as investors shrugged off Iranian tensions. S&P500 staged a modest overnight recovery, led by tech stocks, while the UST bonds yield curve flattened with the 10-year bond yield at 1.81 percent, and gold prices was little changed. News about the repositioning of US forces in Iraq was dismissed as a draft that should never have been circulated.

Meanwhile, the S&P/ASX 200 index traded nearly 1 percent higher at 6,755.00 by 03:00GMT.