Australian bonds plunge tracking U.S. Treasuries on trade deal optimism, buoyant economic data

The Australian bonds plunged during Asian session Thursday tracking a similar movement in the United States Treasuries as trade deal optimism flooded investor sentiments amid rather buoyant economic data that indicated some stabilization in the ongoing economic slowdown.

The yield on Australia’s benchmark 10-year note, which moves inversely to its price, jumped 7 basis points to 1.272 percent, the yield on the long-term 30-year bond also surged 7 basis points to 1.879 percent and the yield on short-term 2-year gained nearly 6 basis points to 0.841 percent by 04:30GMT.

Global risk sentiment continued to hold on though the US equity market paused its gains after Fedex shares fell by 10 percent due to lower profit forecast for 2020.The impeachment debate overnight before the official vote this morning is likely to have limited impact on the market as the vote was mostly adopted on partisan lines. The result is unlikely to change how the Fed assesses the economy as well as the progress of US-China trade talk, OCBC Treasury Research reported.

Two more Fed officials joined their colleagues sharing the optimistic outlook on the US economy yesterday. Chicago Fed official Evans said the economy is doing remarkably well. Meanwhile, New York Fed President John Williams also expects the US economy to grow by about 2 percent in 2020 while the unemployment rate will stay close to its current 3.5 percent level, the report added.

Meanwhile, the S&P/ASX 200 index edged tad -0.32 percent down to 6,763.50 by 04:35GMT.