Australian bonds gain along with U.S. Treasuries after President Trump questions Fed rate hikes

Australian bonds gained on last trading day of the week Friday along with U.S. Treasuries after President Donald Trump questioned Federal Reserve interest rate hikes and strong dollar.

The yield on Australia’s benchmark 10-year Note, which moves inversely to its price, fell 5 basis points to 2.628 percent, the yield on the long-term 30-year Note also dipped 5 basis points to 3.096 percent and the yield on short-term 2-year down 2 basis points to 2.048 percent by 03:00 GMT.

President Trump appeared to question having an independent US Federal Reserve in a CNBC interview b remarking he is “not thrilled” by rising interest rates and bemoaning the strength of the US dollar while China’s currency drops like a “rock”. The White House issued a statement afterwards saying the President respects the central bank's independence, said St.George Bank in its laest research note.

In the United States, the U.S. Treasuries fell to 2.847 percent after rising to 2.897 percent on Thursday following Federal Reserve Chair Powell positive outlook on U.S. economy.

Now markets await next week’s Australia Q2 inflation data, which is expected to rise 0.5 percent q/q and 2.2 percent y/y. Higher than expected number will boost the Australian bond yields and Australian dollar.

Meanwhile, the S&P/ASX 200 index traded 0.51 percent higher at 6,234.5 by 03:30 GMT, while at 03:00GMT, the FxWirePro's Hourly AUD Strength Index remained neutral at -7.68 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex