Australian bonds sharply rebound on hopes of rise in unemployment rate

The Australian bonds sharply rebounded Wednesday on expectations of a rise in the country’s unemployment rate and ahead of the country’s labour market report for the month of June, scheduled to be released on July 20.

The yield on the benchmark 10-year Treasury note, which moves inversely to its price, slumped 3 basis points to 2.72 percent, the yield on 15-year note plunged nearly 4 basis points to 3.03 percent and the yield on short-term 2-year traded 1-1/2 basis points lower at 1.91 percent by 03:50 GMT.

The Australian bonds tracked gains in the U.S. counterpart following mounting concerns about the U.S. administration’s ability to enact fiscal stimulus after a crucial health-care bill was scuppered, as well as weak inflation data, leaving investors doubting the strength of the global economy and thus, sending Treasuries, bunds and gilts higher. The dollar held at the lowest level in almost a year.

The central bank, in its meeting minutes, released Tuesday, has highlighted growing divergences in the domestic economy at its most recent policy meeting, but said the outlook for the second quarter remained generally positive following a slow start to the year.

Meanwhile, the ASX 200 index jumped 0.61 percent to 5,663.50 by 04:10GMT, while at 04:00GMT, the FxWirePro's Hourly AUD Strength Index remained slightly bullish at 87.59 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex

FxWirePro launches Absolute Return Managed Program. For more details, visit http://www.fxwirepro.com/invest