Australian bonds gain in silent session as investors await December employment report

The Australian bonds gained during Asian session of the second trading day of the week Tuesday as investors remained side-lined in a silent session that witnessed data of little economic significance ahead of the country’s employment report for the month of December, scheduled to be released on January 23 by 00:30GMT.

The yield on Australia’s benchmark 10-year note, which moves inversely to its price, slumped nearly 2-1/2 basis points to 1.155 percent, the yield on the long-term 30-year bond also suffered nearly 2-1/2 basis points to 1.770 percent and the yield on short-term 2-year lost 1-1/2 basis points to trade at 0.752 percent by 02:35GMT.

The IMF tips the global economy to rebound from 2.9 percent in 2019 to 3.3 percent this year, marking the first pickup in three years but is still a marginal downgrade from its October forecast, OCBC Treasury Research reported.

Notably, while there were modest changes to the US (-0.1 percentage point to 2 percent) and Euro area forecasts, and India saw a relatively large downgrade (>1 percentage point), but China’s growth was upgraded by 0.2 percentage points to 6 percent whilst Japan’s forecast was also raised by 0.2 percentage points to 0.7 percent. The IMF’s 2020 global trade growth was also cut from 3.2 percent to 2.9 percent, albeit this is an improvement from 2019’s 1 percent, the report added.

"Asian markets may drift with a consolidative tone this morning, amid news that the coronavirus from Wuhan is spreading geographically and also to medical workers and as the US markets reopen after a holiday yesterday," OCBC further noted.

Meanwhile, the S&P/ASX 200 index traded tad -0.50 percent down at 6,988.50 by 02:40GMT.