Australian bonds tad lower after September business confidence cheers investors; RBA’s Ellis’ speech eyed

Australian government bonds traded tad lower during Asian session Tuesday after the country’s business confidence cheered market participants, adding to slight optimism in risk-taking. Investors will now eye the Reserve Bank of Australia’s (RBA) Assistant Governor Ellis’ speech and the central bank’s Financial Stability Review report, scheduled on October 10 and 12 by 22:30GMT and 00:30GMT respectively.

The yield on Australia’s benchmark 10-year note, which moves inversely to its price, rose 1/2 basis point to 2.785 percent, the yield on the long-term 30-year bond gained nearly 1 basis point to 3.268 percent and the yield on short-term 2-year traded nearly 2-1/2 basis points higher at 2.051 percent by 03:25GMT.

Australia’s NAB business conditions rose slightly in September, to 14.8 from 14.0. Conditions remain below the peak seen through 2017-18, but are otherwise the strongest since the Global Financial Crisis.

Lastly, the recent surge in US bond yields is weighing on equities, with the Fed talking tough on interest rate rises and markets digesting how far US interest rates may rise.

Meanwhile, the S&P/ASX 200 index traded 0.67 percent lower at 6,027.5 by 03:30 GMT, while at 03:00GMT, the FxWirePro's Hourly AUD Strength Index remained slightly bearish at 75.89 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex