Australian bonds yields plunge as Powell seen likely Fed chair pick

Australian bonds rallied Tuesday as investors poured into safe-haven assets tracking a similar movement in the U.S. counterpart after Fed Governor Jerome Powell seems to be in the run-up for succeeding Janet Yellen in early February next year.

The yield on the benchmark 10-year Treasury note, which moves inversely to its price, fell 5-1/2 basis points to 2.686 percent, the yield on the long-term 30-year note also declined 5-1/2 basis points to 3.453 percent and the yield on short-term 2-year slid 3-1/2 basis points to 1.832 percent by 02:30 GMT.

U.S. Treasury debt yields fell on Monday on news reports that U.S. President Donald Trump is likely to appoint Federal Reserve Governor Jerome Powell, who is viewed as more dovish than other contenders, as head of the Federal Reserve.

A source familiar with the matter said on Monday that Powell is likely to replace Janet Yellen. Trump is expected to announce his choice on Thursday, a White House official said separately. The New York Times also reported on Monday that Powell was expected to be named Fed chairman on Thursday.

Markets now look ahead to the November FOMC statement on Wednesday, in which it is widely expected to deliver no change in the overnight rate.

Meanwhile, the S&P/ASX 200 index traded flat at 5,900.5 by 02:30 GMT, while at 02:00GMT, the FxWirePro's Hourly AUD Strength Index remained neutral at -63.01 (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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