Australian bonds jump tracking U.S. Treasuries on weak initial jobless claims, hurricane worries

The Australian bonds jumped during early Asian trading Friday, tracing its U.S. counterpart after yields rose on Thursday as weak U.S. jobless claims data and worries about the impact of hurricanes Irma and Harvey on the world’s largest economy boosted investors’ demand for safe-haven government debt.

The yield on the benchmark 10-year Treasury note, which moves inversely to its price, slumped 7 basis points to 2.59 percent, the yield on 15-year note plunged 6-1/2 basis points to 2.88 percent and the yield on short-term 2-year traded nearly 3 basis points lower at 1.86 percent by 03:30GMT.

Hurricane Irma, one of the most powerful storms to hit the Atlantic in a century, was on track to reach Florida on Saturday or Sunday, becoming the second major hurricane to hit the U.S. mainland in as many weeks. Hurricane Harvey, which hit Texas and Louisiana more than a week ago, has claimed 60 lives and caused property damage estimated as high as $180 billion.

The storm caused U.S. initial jobless claims to spike to a two-year high. Initial claims for state unemployment benefits surged by 62,000 to a seasonally adjusted 298,000 for the week ended Sept. 2, the highest since April 2015.

In mid-morning trading, benchmark 10-year Treasury yields fell to 2.049 percent, from 2.106 percent late on Wednesday. 10-year yields fell to their lowest since November 10.

Meanwhile, the S&P/ASX 200 index fell 0.47 percent to 5,666.00 by 03:30 GMT, while at 03:00GMT, the FxWirePro's Hourly AUD Strength Index remained neutral at 118.21 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex

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