Australian bonds remain tad down amid muted trading session; U.S. Treasury yields rise on impressive data

Australian government bonds remained tad lower during Asian trading session Friday amid a muted trading session that witnessed data of little economic significance, as the United States Treasury yields also rose following a set of impressive economic data.

The yield on Australia’s benchmark 10-year note, which moves inversely to its price, remained tad lower at 1.650 percent, the yield on the long-term 30-year bond also slipped slightly to 2.293 percent and the yield on short-term 2-year traded nearly 1-1/2 basis points lower at 1.234 percent by 05:00GMT.

Global risk sentiments steadied overnight following better than expected US housing data and healthy earnings from Cisco and Walmart, notwithstanding China’s rebuttal that US’ move to put Huawei on its entity list effective today will hurt trade talks. With no fresh tariff or trade salvos overnight, the S&P500 rose 0.9 percent and UST bonds slipped with the 10-year yield at 2.40 percent, OCBC Treasury Research reported.

Also, the Fed’s inflation rhetoric continued to evolve but give no hints of any rate cut intentions - Kashkari opined that “monetary policy has been too tight in this recovery, resulting in a slower economic recovery than necessary and low inflation expectations, which directly saps the Fed’s ability to respond to a future downturn”, whereas Brainard suggested the Fed could allow “opportunistic reflation” and “communicate that a mild overshooting of inflation is consistent with our goal”, the report added.

Meanwhile, the S&P/ASX 200 index traded 0.34 percent lower at 6,368.5 by 05:15GMT, while at 05:00GMT, the FxWirePro's Hourly AUD Strength Index remained neutral at -58.13 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex