Australian bonds open trading week on higher note tracking U.S. Treasuries following global economic concerns

The Australian government bonds opened on a higher note on the first trading day of the week Monday, tracking a similar movement in the United States Treasuries following global economic concerns, after employment data in the U.S. disappointed market sentiments.

The yield on Australia’s benchmark 10-year note, which moves inversely to its price, slumped 2 basis points to 0.878 percent, the yield on the long-term 30-year bond suffered 2-1/2 basis points to 1.491 percent and the yield on short-term 2-year too traded 2 basis points lower at 0.617 percent by 04:25GMT.

News that Chinese officials are narrowing the scope of trade negotiations for the upcoming trade talks with the US this week to exclude commitments to reform Chinese industrial policy and government subsidies may add to market jitters to start the week, OCBC Treasury Research reported.

This may take the shine off Friday’s US labour market report which saw September nonfarm payrolls disappointing at 136k (with manufacturing payrolls shrinking for the first time since March by 2k), albeit with a +45k upward revision for the previous two months data and the unemployment rate hitting a 50-year low of 3.5 percent, whilst average hourly earnings were muted at zero percent m/m (2.9 percent y/y), the report added.

Meanwhile, the S&P/ASX 200 index remained flat at 6,495.50 by 04:30GMT.