Australian bonds plunge after U.S. 30-year Treasury yield touches 3-week high on solid labour market data

Australian government bonds plunged during Asian session Friday after the United States 30-year Treasury yield touched 3-week high tracking a solid reading of the latter’s labour market, unveiled late yesterday.

The yield on Australia’s benchmark 10-year note, which moves inversely to its price, jumped nearly 3 basis points to 1.887 percent, the yield on the long-term 30-year bond surged 3-1/2 basis points to 2.522 percent and the yield on short-term 2-year traded 1 basis point higher at 1.495 percent by 03:55GMT.

Treasury prices retreated, sending yields higher, after investors dealt with a raft of data that indicated growth pressures were far from moribund in the U.S., helping to diminish concerns around a global economic slowdown, MarketWatch reported.

Initial jobless claims for the week ending in April 6 fell to 196,000, its lowest since 1969. And producer prices surged 0.6 percent in March, well above the 0.3 percent expected from economists polled by MarketWatch, though the core gauge excluding energy and food prices was flat on the month.

Further, on Wednesday, U.S. Treasury Secretary Steven Mnuchin said China and the U.S. have “pretty much agreed” to an enforcement mechanism for the trade deal, one of the major sticking points in negotiations thus far. Analysts attribute the inability of bond yields to bounce back this year to the cloud of uncertainty over U.S.-China trade relations, which has helped dampen business optimism and global growth, the report added.

Meanwhile, the S&P/ASX 200 index traded tad 0.25 percent higher at 6,225.50 by 03:55GMT, while at 03:00GMT, the FxWirePro's Hourly AUD Strength Index remained neutral at 21.58 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex