Australian bonds plunge tracking weakness in U.S. Treasuries post 2-year auction

The Australian bonds plunged Wednesday tracking weakness in the United States counterpart after a solid supply at the 2-year debt auction held late yesterday. Also, with members of the OPEC set to meet in Vienna this Thursday, investors will keep a keen eye on the oil market this week.

The yield on the benchmark 10-year Treasury note, which moves inversely to its price, jumped nearly 4 basis points to 2.49 percent, the yield on the 15-year note climbed 3-1/2 basis points to 2.91 percent and the yield on short-term 2-year traded nearly 1 basis point higher at 1.62 percent by 03:30 GMT.

The Treasury Department auctioned USD26 billion in two-year notes at a high yield of 1.316 percent, its highest since September 2008. The bid-to-cover ratio, an indicator of demand, was 2.90, its highest since May 2016.

Further, U.S. government debt prices erased slight gains on Tuesday, as investors digested news out of Donald Trump's first overseas trip as President as well as fresh supply. Lastly, markets will now focus on the speech of Reserve Bank of Australia’s (RBA) Assistant Governor Debelle, scheduled to be held on May 25 for further direction in the debt market.

Meanwhile, the ASX 200 index traded 0.32 percent down at 5,765.50 by 03:40GMT, while at 03:00GMT, the FxWirePro's Hourly AUD Strength Index remained slightly bearish at -75.30 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex