Australian bonds tad higher on Brexit details, U.S.-China trade uncertainties

The Australian government bonds traded tad higher during Asian session Wednesday tracking a similar movement in the U.S. Treasuries following news on Brexit until the final exit on October 31 and China trade uncertainties.  

The yield on Australia’s benchmark 10-year note, which moves inversely to its price, jumped 2-1/2 basis points to 1.176 percent, the yield on the long-term 30-year bond surged 2 basis points to 1.763 percent while the yield on short-term 2-year traded flat at 0.802 percent by 05:30GMT.

Global risk sentiment is still hanging off the Brexit headlines with the latest development that UK PM Johnson’s plan to fast-track his Brexit accord through Parliament was rejected, which dragged the GBP lower, OCBC Treasury Research reported.

In the scenario that Brexit is delayed until January 31, a fresh election looks likely. The CBI survey warned that the industry outlook is the weakest since 2009, the report added.

Elsewhere, the US has approved duties on aluminium wire and cable imports from China for dumping, even as White House advisor Kudlow opined that phase one is moving ahead very nicely. The S&P500 fell 0.36 percent overnight, whilst UST bonds gained with the 10-year yield at 1.77 percent, OCBC further noted in the report.

Meanwhile, the S&P/ASX 200 index traded flat at 6,645.50 by 05:35GMT.