Australian 10-year yield falls to over 2-month low on growing trade tensions; RBA March meeting minutes in focus

Australian government bonds rallied on the last trading day of the week Friday, rising more than 6 percent so far this week on growing angst among investors over trade war which would hurt the global economy. Now, markets await the Reserve Bank of Australia’s March meeting minutes.

The yield on the benchmark 10-year Treasury note, which moves inversely to its price, fell 2-1/2 basis points to 2.702 percent, the yield on the long-term 30-year note dipped 3 basis points to 3.277 percent and the yield on short-term 2-year down 2-1/2 basis points to 1.977 percent by 02:20 GMT.

In the United States, Treasuries were little changed across much of the curve on Thursday, despite downward pressure registered in the short-end. On the data front, markets received a mixed bag, highlighted by solid gains in Empire manufacturing and contrasted by a modest pullback from the Philadelphia Fed manufacturing release.

Meanwhile, markets also saw a modest pullback in initial jobless claims and a further increase in import prices. Markets now look ahead to a milder flow of data to finish off the week on Friday, highlighted by housing starts/building permits, industrial production/capacity utilization and University of Michigan consumer sentiment releases, though none is likely to have a lasting impact on the economic outlook (or outlook for interest rates).

Meanwhile, the S&P/ASX 200 index traded 0.10 percent higher at 5,928.5 by 02:30 GMT, while at 03:00GMT, the FxWirePro's Hourly AUD Strength Index remained neutral at -67.18 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex

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