Australian bonds jump in muted trading ahead of RBA Governor Lowe’s speech amid global tensions

The Australian government bonds jumped during Asian session of the first trading day of the week Monday amid a muted session that witnessed data of little economic significance ahead of the Reserve Bank of Australia’s (RBA) Governor Philip Lowe’s speech, scheduled to be delivered on September 24 by 09:55GMT amid a wave of global geopolitical tensions.

The yield on Australia’s benchmark 10-year note, which moves inversely to its price, plunged 7 basis points to 0.986 percent, the yield on the long-term 30-year bond slumped nearly 6 basis points to 1.580 percent and the yield on short-term 2-year suffered nearly 3 basis points to 0.752 percent by 04:20GMT.

Global risk sentiments continued to wax and wane, even as both US and China suggested last week’s talks were constructive and China Business News reported Vice Agriculture Minister Han Jun’s comments that China’s cancellation of US farm state visits had nothing to do with trade talks, OCBC Treasury Research reported.

President Trump was busy tweeting over the weekend again, indicating that “we should always be paying less interest than others”, “I have no intention of meeting with Iran” at the UN General Assembly this week, and his preference for a complete trade deal with China, the report added.

The spokesperson from China’s agriculture Ministry said on Sunday that the change of schedule to visit US farms has nothing to do with the negotiation. Although China has denied that the farm-trip cancellation was the result of negotiation, Trump’s flipflop on an interim deal may keep risk sentiment in check this week after he moved away from the consideration of an interim deal in looking for a complete deal, OCBC further noted in the report.

Meanwhile, the S&P/ASX 200 index edged tad 0.33 percent up to 6,740.50 by 04:25GMT.