Australian bonds fall following weakness in U.S. Treasuries, November retail sales in focus

The Australian government bonds slid Monday as investors moved away from safe-haven instruments following weakness in the U.S. Treasuries. Also, November retail sales remain the core focus among investors that is scheduled to be released on January 11.

The yield on the benchmark 10-year Treasury note, which moves inversely to its price, jumped nearly 7 basis points to 2.77 percent, the yield on 15-year note rose 5 basis points to 3.21 percent and the yield on short-term 2-year rose 5 basis points to 1.90 percent by 05:00 GMT. (Corrected)

The Australian bonds have been closely following developments in the U.S. debt market. The U.S. benchmark 10-year bond yields rose over 8bps to 2.42 percent on strong rebound in wages, pointing to sustained momentum in the country’s labor market. However, markets shrugged off lower-than-expected non-farm payrolls and rise in the rate of unemployment.

U.S. average hourly earnings rose 0.4 percent m/m, while non-farm payrolls came in at 156,000, lower than market expectations of 178,000. Further, the rate of unemployment December slightly rose to 4.7 percent, from 4.6 percent in November.

Meanwhile, the benchmark Australia's S&P/ASX 200 index traded 0.81 percent higher at 5,773 by 05:30 GMT. While at 05:00 GMT, the FxWirePro's Hourly Australian Dollar Strength Index remained slightly bullish at 87.25 (higher than +75 represent a bullish trend).