Australian bonds edge lower following recovery in risk sentiments; trade tensions could favour prices

Australian government bond yields edged lower on Monday as investors moved their funds to high yielding alternative assets like equities.

The yield on Australia’s benchmark 10-year note, which moves inversely to its price, rose 1 basis point to 2.667 percent, the yield on the long-term 30-year note climbed 1-1/2 basis points to 3.266 percent and the yield on short-term 2-year up 1/2 basis point to 2.048 percent by 02:30 GMT.

In the United States, Treasuries saw a mixed performance to finish off the week on Friday as buying in the short-end was contrasted by modest downward pressure further out the curve (as markets continued to worry about a potential looming trade war). In terms of data, markets were greeted by stronger than expected durable goods orders for February, bolstered by solid gains in orders of non-defence capital goods, ex-aircraft.

On Friday, the U.S. 10-year T-note yield was up 1 basis point on the day at about 2.83 percent after having managed to hold above the key 2.80 percent level despite the risk-off mood in the markets. The S&P 500 future was in the red by about 5 points after the index fell 2.5 percent on Thursday.

However, market trade-related tensions are rising as Russia is also reportedly preparing restrictions on US imports in response to the Trump metals tariffs after China.

Meanwhile, the S&P/ASX 200 index traded 0.51 percent higher at 5,771.5 by 02:40 GMT, while at 03:00GMT, the FxWirePro's Hourly AUD Strength Index remained highly bearish at -121.911 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex

FxWirePro launches Absolute Return Managed Program. For more details, visit http://www.fxwirepro.com/invest