South Korea Extends Bond Market Stabilization Measures Amid Rising Financial Risks 
Modi and Trump Hold Phone Call as India Seeks Relief From U.S. Tariffs Over Russian Oil Trade 
China’s Small Bank Consolidation Struggles as Profits Fall and Risks Persist 
Indonesia–U.S. Tariff Talks Near Completion as Both Sides Push for Year-End Deal 
Russia Stocks End Flat as Energy and Retail Shares Show Mixed Performance 
Wall Street Futures Dip as Broadcom Slides, Tech Weighed Down Despite Dovish Fed Signals 
Asian Currencies Hold Steady as Indian Rupee Slides to Record Low on Fed Outlook 
Gold Prices Fall Amid Rate Jitters; Copper Steady as China Stimulus Eyed 
Gold Prices Slip Slightly in Asia as Silver Nears Record Highs on Dovish Fed Outlook 
Asian Currencies Steady as Fed Delivers Hawkish Rate Cut; Aussie and Rupee Under Pressure 
ASX Shares Slide After ASIC Imposes A$150 Million Capital Requirement 
Japan Business Sentiment Hits Four-Year High, Boosting Expectations of BOJ Rate Hike 
Australian government bonds slumped across the curve during Asian trading session Tuesday as markets remain optimistic for a possible U.S.-China trade deal. Also, investors now eye Q4 inflation data.
The yield on Australia’s benchmark 10-year note, which moves inversely to its price, rose 3-1/2 basis points to 2.247 percent, the yield on the long-term 30-year bond also jumped 4 basis points to 2.763 percent and the yield on short-term 2-year also traded nearly 3 basis points higher at 1.851 percent by 03:40 GMT.
“Markets remain optimistic for a possible U.S.-China trade deal. Having relented on the U.S. government shutdown, President Donald Trump needs to show a win on trade at his State of the Union address on 5 February,” noted Philip Wee, FX strategist at DBS group research.
"But this morning’s indictments by the U.S. Department of Justice against China’s Huawei, its chief financial officer, and two bank affiliates illustrate the risks attached to the U.S.-China relationship."
Overnight, yields on the U.S. Treasuries fell, as risk appetite weakened, the U.S. 10-year yields slipped 2 basis points to 2.74 percent. Financial markets are pricing in virtually no chance of a move in rates at the Federal Reserve decision due Wednesday.
On the other hand, global growth worries resurfaced, as key manufacturer Caterpillar warned of slower demand in China. Weaker sentiment weighed on stocks, bond yields and the Australian dollar. Oil prices also fell.
“Australian business conditions fell sharply in December and now sit below their long-term average for the first time since January 2016. The month-to-month drop was the largest since the GFC,” ANZ noted.
“The RBA is generally slow to shift its underlying view, but the case for a material shift is building.”
Markets would now eye Q4 inflation data release, which is scheduled for Wednesday, January 30. It is expected to remain flat at 0.4 percent q/q and decline to 1.7 percent y/y.
Meanwhile, the S&P/ASX 200 index traded 0.33 percent lower at 5,812.50 by 04:00 GMT, while at 04:00GMT, the FxWirePro's Hourly AUD Strength Index remained highly bullish at 127.06 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex
