Australian bonds jump tracking U.S. Treasuries after ECB delays plan to hike interest rates

Australian government bonds jumped during Asian trading session Friday tracking a similar movement in the United States’ Treasuries after the European Central Bank (ECB) decided to delay its plan of interest rate hike and launch a program of banking stimulus lending in the euro zone.

The yield on Australia’s benchmark 10-year note, which moves inversely to its price, plunged nearly 5-1/2 basis points to 2.030 percent, the yield on the long-term 30-year bond slumped nearly 4-1/2 basis points to trade at 2.605 percent and the yield on short-term 2-year traded tad lower at 1.674 percent by 04:20GMT.

According to a report from CNBC, "Yields initially ticked upward following the central bank's decision to keep borrowing costs low, but quickly reversed course and turned lower within minutes."

"The ECB said its new targeted refinancing operations (TLTRO-III) stimulus program will start in September and run through March 2021. The loans offer European banks lower rates, making it easier for them to lend money to consumers with the idea of buoying the economy. This is the third stimulus injection from the ECB since 2014", the report added.

Meanwhile, the S&P/ASX 200 index traded tad 0.38 lower at 6,209.50 by 04:25GMT, while at 04:00GMT, the FxWirePro's Hourly AUD Strength Index remained highly bearish at -105.93 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex