Australian bonds fall following better-than-expected February retail sales data; investors shrug-off global growth warnings

Australian government bonds fell during Asian trading session Wednesday following a better-than-expected rise in the country’s retail sales data for the month of February, released early today. However, investors have largely shrugged-off the global growth warnings, put forward by the World Trade Organization and International Monetary Fund MD Christine Lagarde.

The yield on Australia’s benchmark 10-year note, which moves inversely to its price, jumped 2-1/2 basis points to 1.837 percent, the yield on the long-term 30-year bond surged nearly 3 basis points higher to 2.462 percent and the yield on short-term 2-year traded 1 basis point higher at 1.454 percent by 03:20GMT.

Australian retail turnover rose 0.8 per cent in February 2019, seasonally adjusted, according to the latest Australian Bureau of Statistics (ABS) Retail Trade figures, followed by a rise of 0.1 percent in January.

ABS Director of Quarterly Economy Wide Surveys, Ben Faulkner said, "There were improved results across most industries with rises in food retailing (0.8 percent), department stores (3.5 percent), household goods retailing (1.1 percent) and clothing, footwear and personal accessory retailing (1.6 percent). Other retailing (0.0 percent) and cafes, restaurant and takeaway services (0.0 percent) were relatively unchanged. The rise this month follows subdued results in December 2018 (-0.4 percent) and January 2019 (0.1 percent)."

After markets breathed a sigh of relief over the state of the global economy the last few days, the WTO has now cautioned about the condition of the current situation as they slashed their global trade growth forecast from 3.7 percent to 2.6 percent, OCBC Treasury Research reported.

The organization cited the impact of rising commercial tensions and tariffs as areas of concerns. The IMF’s Lagarde also warned of a “synchronized deceleration” although she doesn’t see a recession is likely in the near term.

On the US – China trade front, Liu He and the accompanying Chinese delegation will begin talks in Washington DC today with their US counterparts, the report added.

Meanwhile, the S&P/ASX 200 index traded flat at 6,264.50 by 03:30GMT, while at 03:00GMT, the FxWirePro's Hourly AUD Strength Index remained neutral at 16.54 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex