Australian bonds trade range-bound amid global trade tensions; eyes on RBA’s financial stability report

Australian short-term government bonds edged slightly lower on Thursday as markets trade in a range-bound, as investors are still nervous about global trade tensions. Also, the traders will now focus on the Reserve Bank of Australia’s (RBA) financial stability report.

The yield on Australia’s benchmark 10-year Note, which moves inversely to its price, traded flat at 2.685 percent, the yield on the long-term 30-year Note dipped nearly 1 basis point to 3.266 percent and the yield on short-term 2-year also rose nearly 1 basis point to 2.050 percent by 03:30 GMT.

In the United States, Treasuries saw range-bound action overnight as markets absorbed a number of competing factors. In part, markets now await the prospect of heightened military tension as President Trump mulls over the possibility of missile strikes in Syria following recent chemical attacks.

Additionally, markets received minutes from the 20-21 FOMC meeting that suggested broad support for additional policy tightening in the quarters ahead as policymakers look to avoid economic overheating following the injection of fiscal support though many contacts also cited concerns related to tariffs and corresponding retaliation.

Markets now look ahead to a lighter flow of data on Thursday, highlighted by import prices and jobless claims, followed by a 30-year Bond auction later in the session.

Meanwhile, the S&P/ASX 200 index traded 0.16 percent lower at 5,787.5 by 03:35 GMT, while at 03:00GMT, the FxWirePro's Hourly AUD Strength Index remained neutral at 4.99 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex

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