Australian bonds jump following lower-than-expected October trade balance; shrug-off rise in October retail sales

Australian government bonds jumped during Asian session Thursday after the country’s trade balance data for the month of October came in lower than market expectations, also down from the previous reading in September.

Further, investors have largely shrugged-off the rise in Australia’s retail sales data for the similar period.

The yield on Australia’s benchmark 10-year note, which moves inversely to its price, plunged 2-1/2 basis points to 2.474 percent, the yield on the long-term 30-year bond also slumped 2-1/2 basis points to 2.997 percent and the yield on short-term 2-year traded 4 basis points down at 1.927 percent by 03:30GMT.

Australia’s monthly trade balance deteriorated to a surplus of AUD2,316 million in October. September’s surplus was revised slightly lower to AUD2,940 million (from AUD3,017 million). October’s change reflects a 3.2 percent m/m increase in imports and a 1.3 percent increase in exports.

Further, the country’s retail sales rose by 0.3 percent m/m in October, in line with market expectations but from a downwardly revised 0.1 percent m/m rise the previous month. In annual terms, sales growth was steady at 3.6 percent y/y, but in six-month end annualised terms sales growth slowed to 2.6 percent from 3.1 percent in September.

Meanwhile, the S&P/ASX 200 index traded 0.65 percent lower at 5,638.5 by 03:40GMT, while at 03:00GMT, the FxWirePro's Hourly AUD Strength Index remained highly bearish at -145.665 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex