Australian bonds jump after weekly consumer confidence falls; eyes on December employment report

Australian government bonds jumped across the curve during Asian trading session Tuesday following a fall in the country’s weekly consumer confidence index as investors wait to watch the employment report for the month of December, scheduled to be released on January 24 by 00:30GMT.

The yield on Australia’s benchmark 10-year note, which moves inversely to its price, slipped 1 basis point to 2.301 percent, the yield on the long-term 30-year bond fell 1-1/2 basis points to 2.823 percent and the yield on short-term 2-year traded tad higher at 1.895 percent by 03:50 GMT.

ANZ-Roy Morgan Australian consumer confidence was down 0.9 percent last week, giving back much of the prior week’s gain. The overall index is still above its starting point for 2019, though it is almost 5 percent lower than its average for January 2018.

Further, the IMF cut its global growth forecast to 3.5 percent from 3.7 percent for 2019, which would represent a slowdown from their expected growth forecast of 3.7 percent for 2018. However, the fund left its forecast unchanged for the US and China whilst they adjusted the forecasts for Europe downwards. At this point, the IMF’s cut is already just a confirmation of existing concerns of a slower 2019, OCBC Treasury Research reported.

Meanwhile, the S&P/ASX 200 index traded 0.52 percent lower at 5,796.00 by 03:55GMT, while at 03:00GMT, the FxWirePro's Hourly AUD Strength Index remained highly bearish at -135.07 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex