Australian bonds surge after January retail sales misses expectations, albeit up from prior

Australian government bonds surged during Asian trading session Thursday after the country’s retail sales for the month of January missed market expectations, albeit showing an improvement from the prior reading in December last year.

In addition, the country’s trade balance data were also out for the similar month, showing a jump from that in the previous and also, beating investors’ anticipations, to which bon prices turned a deaf ear.

The yield on Australia’s benchmark 10-year note, which moves inversely to its price, slumped 2 basis points to 2.077 percent, the yield on the long-term 30-year bond also fell nearly 2 basis points to trade at 2.643 percent and the yield on short-term 2-year traded nearly 1-1/2 basis points lower at 1.677 percent by 04:00GMT.

Australia’s retail sales rose 0.1 percent m/m in January, below market expectations. In annual terms, sales growth slowed to 2.7 percent (from 2.8 percent in December), registering the weakest annual growth since May last year. In three-month-end annualised terms, sales growth slowed to 0.8 percent, the lowest rate since the August and September 2017.

However, the country’s monthly trade balance improved to a surplus of AUD4,581 million – the highest since December 2016. Underlying this was a 5.0 percent increase in exports, while imports rose 3.3 percent.

Meanwhile, the S&P/ASX 200 index traded tad 0.30 higher at 6,267.50 by 04:10GMT, while at 04:00GMT, the FxWirePro's Hourly AUD Strength Index remained slightly bearish at -93.02 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex