Australian bond yields rise as investors’ risk sentiment improves overnight

Australian government bonds traded a little lower during Asian trading session Tuesday as investors risk sentiment improved overnight following a rebound in the U.S. retail sales.

The yield on Australia’s benchmark 10-year note, which moves inversely to its price, traded 1/2 basis points higher at 2.034 percent, the yield on the long-term 30-year bond traded flat  at 2.619 percent and the yield on short-term 2-year traded tad higher at 1.676 percent by 04:40GMT.

“The U.S. 10-year treasury yield closed 1 basis point higher and showed little reaction to the retail sales data. The US 2-year yield nudged 2 basis points higher. Futures markets continued to price little chance of any further Fed rate hikes in this cycle,” noted St.George Bank.

Asian markets may attempt to rally today to build on fragile Brexit hopes that may not sustain pending the result of the UK Parliament vote.

“Market sentiments regarding Brexit improved overnight as May and Juncker made “meaningful” adjustments to the deal that will go to the House of Commons today. PM May called the changes “legally binding changes” whereas Juncker warned “it is this deal, or Brexit may not happen at all,” noted OCBC Bank.

“Wall Street climbed overnight, buoyed by tech stocks and notwithstanding the Boeing retreat following the 737 Max flight crash, whilst the 10-year UST bond yield closed up slightly at 2.64 percent.”

Meanwhile, the S&P/ASX 200 index traded -0.53 percent lower at 6,187.50 by 04:50GMT, while at 04:00GMT, the FxWirePro's Hourly AUD Strength Index remained neutral at 48.31 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex