Australian bonds suffer tracking U.S. Treasuries on solid corporate earnings, U.S.-China trade relief

The Australian government bonds suffered during Asian session of the second trading day of the week Tuesday tracking a similar movement in the U.S. Treasuries after a slew of solid corporate earnings pushed Wall Street higher overnight.

Also, slight relief from U.S.-China trade talks, after President Donald Trump indicated that China has “started the buying” of US agricultural goods, weighed on debt prices.

The yield on Australia’s benchmark 10-year note, which moves inversely to its price, jumped 2-1/2 basis points to 1.176 percent, the yield on the long-term 30-year bond surged 2 basis points to 1.763 percent while the yield on short-term 2-year traded flat at 0.802 percent by 04:20GMT.

Investors also interpreted the UK Speaker John Bercow’s rejection of a second vote on PM Boris Johnson’s Brexit deal (“repetitive and disorderly” and “in substance the same as Saturdays motion”) as implying a Brexit extension is more likely, even though Johnson will introduce the Withdrawal Agreement Bill again today, OCBC Treasury Research reported.

The S&P500 rose 0.69 percent, summiting the 3000 handle with Apple Inc hitting a record, whilst UST bonds sold off with a steepening bias as the 10-year yield pushed higher by 5bps to 1.8 percent, the report added.

Meanwhile, the S&P/ASX 200 index traded tad 0.23 percent up at 6,653.50 by 04:30GMT.