Australian bonds trade flat in muted session as investors await Fed Chair Powell’s testimony

Australian government bonds remained flat during Asian trading session Tuesday amid a muted trading day that witnessed data of little economic significance ahead of Federal Reserve Chair Jerome Powell’s scheduled testimony later this Thursday.

The yield on Australia’s benchmark 10-year note, which moves inversely to its price, barely slipped to 1.325 percent, the yield on the long-term 30-year bond fell 2 basis points to 1.955 percent and the yield on short-term 2-year traded about 4 basis points higher at 0.976 percent by 05:05GMT.

Global equity markets retreated further on Monday as market continued to reassess their expectation on the Fed aggressive rate cut following the stronger than expected US job data last Friday, OCBC Treasury Research reported.

Investors await Powell’s congressional testimony this week to gauge the prospects for monetary easing amid mixed and conflicting signs on US economic performance. US 10 year treasury yields continued to rise as it moved closer to the 2.05 percent mark whilst the DXY also ended stronger.

The latest survey from the New York Fed shows that consumers’ one-year inflation outlook has risen by 0.2 percent, to 2.7 percent, the report added.

Meanwhile, the S&P/ASX 200 index fell -0.33 percent to 6,595.50 by 05:10GMT