Australian bonds mixed on optimism over U.S.-China trade deal; U.S. yields close at record high

The Australian bonds remained mixed during Asian session of the second trading day of the week Tuesday following optimism over the U.S.-China trade deal that pushed stocks to close at record-highs in the overnight session.

In addition, the U.S. Treasury yields also ended at all-time highs yesterday as investors shifted interest towards safe-haven assets.

The yield on Australia’s benchmark 10-year note, which moves inversely to its price, jumped nearly 2 basis points to 1.170 percent, the yield on the long-term 30-year bond surged 1-1/2 basis points to 1.772 percent while the yield on short-term 2-year suffered 1-1/2 basis points to 0.754 percent by 04:30GMT.

US equity market closed at record on Monday on the back of US-China phase one deal. The White House advisor Kudlow said the trade deal has been "absolutely completed" and China is going to "double US exports to China", according to the latest report from OCBC Treasury Research.

Asian markets are likely to trade on a firmer note today, following overnight US indices higher, the report added.

The minutes of the RBA’s December meeting were less dovish than the previous one, but the weakness in private consumption in Q3 is expected to prompt the Bank to cut rates in February, Capital Economics reported.

The Bank acknowledged the weakness in business confidence and consumer sentiment, but in each case emphasised those elements of the surveys that were less pessimistic. And it stuck to its line that the economy had reached “a gentle turning point”, the report added.

Even so, Board members noted that the “current rate of wages growth was not consistent with inflation being sustainably within the target rage, nor was it consistent with consumption growth returning to trend, Capital Economics further noted.

Meanwhile, the S&P/ASX 200 index slipped -0.29 percent to 6,782.50 by 04:35GMT.