Australian bonds plunge as U.S. 10-year Treasury yields break 1.70 pct mark

The Australian government bonds plunged Wednesday as the United States 10-year Treasury yields broke the 1.70 percent mark on rising risk appetite among investors. Also, markets remained focused on Thursday’s unemployment rate data, which is expected to remain unchanged at 5.7 percent in August period.

The yield on the benchmark 10-year Treasury note, which moves inversely to its price, rose 5-1/2 basis points to 2.168 percent and the yield on short-term 2-year climbed 2 basis points to 1.617 percent at 04:30 GMT.

“Global yields continued to climb overnight and curves shifted steeper once again. We expect the momentum to continue and for Australian yields to underperform,” said ANZ in a research note.

Following U.S. Treasuries, the benchmark 10-year note settled at 1.732 percent, from Monday’s closing of 1.671 percent. This was marked as the highest close of yields since June 23 this year.

In term of recent economic data, Australia’s September Westpac consumer confidence eased +0.3 percent m/m, from 2.0 percent in August. Additionally, Australia’s August business confidence rose to 6, compared to 4 in July, while business conditions fell to 7, compared to 9 in July, revised from 8.

Meanwhile, the benchmark Australia's S&P/ASX 200 index traded 0.72 percent higher to 5,204.5 by 04:30 GMT.