Gold and Silver Surge as Safe Haven Demand Rises on U.S. Economic Uncertainty 
BoE Set to Cut Rates as UK Inflation Slows, but Further Easing Likely Limited 
U.S. Stock Futures Slip After CPI-Fueled Rally as Markets Weigh Economic Uncertainty 
Trump Defends Economic Record in North Carolina as Midterm Election Pressure Mounts 
Asian Currencies Slip as Dollar Strengthens; Indian Rupee Rebounds on Intervention Hopes 
EU Delays Mercosur Free Trade Agreement Signing Amid Ukraine War Funding Talks 
Canada Signals Delay in US Tariff Deal as Talks Shift to USMCA Review 
Oil Prices Steady in Asia but Headed for Weekly Loss on Supply Glut Concerns 
Australian government bonds slumped across the curve during Asian trading session Tuesday on hopes of possible trade agreement. Still, low investor risk appetite due to fear of another U.S. government shutdown, limited the growth in bond yields.
“A wall of worries ahead with the increasing probability of another U.S. partial government shutdown, U.S.-China trade talks later this week being complicated by South China Sea issues, and lingering uncertainties like Brexit, is likely to keep global risk sentiments in check for today,” according to the OCBC report.
The yield on Australia’s benchmark 10-year note, which moves inversely to its price, rose about 2 basis points to 2.112 percent, the yield on the long-term 30-year bond also climbed 2 basis points to 2.66 percent and the yield on short-term 2-year jumped over 1 basis points to 1.75 percent by 03:30 GMT.
“We do not expect that the U.S.-China trade talks this week to yield any specific outcomes, but the U.S. rhetoric of sufficient progress on structural issues amid the overshadowing clouds regarding the 5G/Huawei issue and South China seas tensions,” noted OCBC in a report.
“The U.S. Treasury bonds softer and the U.S. dollar underpinned overnight, expect Asian markets to tread carefully in the interim, even as Chinese stock markets re-opened on a firm tone yesterday.”
On the data front, Australia’s housing finance commitments declined at a quickest rate in December. Finance approvals are now 20 percent lower over the year. Further declines are likely as tighter lending standards continue to filter through. On the other hand, business conditions rose in January to 6.6, after the sharply decline in December.
Meanwhile, the S&P/ASX 200 index traded 0.08 percent higher at 6,022.50 by 03:40 GMT, while at 03:00GMT, the FxWirePro's Hourly AUD Strength Index remained neutral at 0.58 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex
