Australian bonds witness sharp rally tracking firm U.S. Treasuries, investors eye RBA Governor Lowe’s speech

The Australian government bonds witnessed sharp rally for the third straight day, following firmness in the U.S. Treasuries. Also, investors are eyeing the Reserve Bank of Australia (RBA) Governor Philip Lowe’s speech scheduled to be held later in the day.

The yield on the benchmark 10-year Treasury note, which moves inversely to its price, plunged 5 basis points to 2.64 percent, the yield on 15-year note also slumped 6-1/2 basis points to 3.09 percent and the yield on short-term 2-year fell 2-1/2 basis points to 1.78 percent by 04:00 GMT.

RBA Governor Lowe is s to deliver his first speech for 2017 at an economics dinner in Sydney later today, while the central bank will release its latest quarterly Statement on Monetary Policy (SoMP) the next day, which should give a clearer indication of the outlook for interest rate movements this year.

In contrast, the Reserve Bank of Australia (RBA) maintained its benchmark interest rate at the current record-low level of 1.50 percent at its first monetary policy meeting of 2017, held Tuesday, as was widely anticipated by market participants, while remaining more upbeat on the global economic conditions.

Lastly, if downside tail risks continue to subside and broader momentum improves as expected, RBA's next policy move will be 25 basis points hike in the first-quarter of 2018.

Meawhile, the ASX 200 index traded 0.02 percent lower at 5,599.50 at 04:50GMT, while at 04:00GMT, the FxWirePro's Hourly AUD Strength Index remained neutral at -40.58 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex