Australian bonds suffer in early trade ahead of RBA’s monetary policy decision

The Australian government bonds suffered during Asian session of the first trading day of the week Monday as investors await the Reserve Bank of Australia’s (RBA) monetary policy meeting, scheduled to be held on October 1 by 04:30GMT for further direction in the debt market.

The yield on Australia’s benchmark 10-year note, which moves inversely to its price, climbed 1 basis point to 0.970 percent, the yield on the long-term 30-year bond also jumped nearly 2-1/2 basis points to 1.589 percent while the yield on short-term 2-year hovered around 0.738 percent by 04:10GMT.

Global risk sentiments may continue to waver amid the US-China trade tensions, especially with news reports suggesting that the Trump administration is considering delisting Chinese companies from US stock exchanges and other measures such as limiting government pension funds’ exposure to the Chinese market and capping Chinese companies included in stock indices managed by US firms, albeit the US Treasury responded to say it is not contemplating the first measure “at this time”, OCBC Treasury Research.

Wall Street closed lower on Friday with US-listed shares of China-based companies like Alibaba and Baidu taking a hit, while UST bonds rallied with yields lower by 2-3bps across the curve and the 10-year yield edging down to 1.68 percent, the report added.

Meanwhile, the S&P/ASX 200 index remained tad 0.37 percent higher at 6,706.50 by 04:15GMT.