Australia bonds tad lower as investors shrug-off U.S. government shutdown
Source: FxWire Pro - Commentary / 21 Jan 2018 22:59:53 Eastern Standard Time
Australian bonds traded tad lower during early Asian session Monday as investors have largely shrugged-off the impact of a government shutdown in the United States, following an indecisive agreement over the country’s tax reform. Investors believe that the uncertainty would be short-termed.
The yield on the benchmark 10-year Treasury note, which moves inversely to its price, dance around 2.85 percent, the yield on the long-term 30-year note slumped 1-1/2 basis points to 3.48 percent and the yield on short-term 2-year traded nearly flat at 2.12 percent by 03:30 GMT.
Democrats and Republicans, locked in a bitter dispute over immigration, failed to agree on a last-minute deal to fund government operations, causing a shutdown at midnight on Friday. Moderate senators from both parties held talks on Sunday to broker a deal.
In the uncertain environment, U.S. bond yields are expected to climb higher, so investors should sell bonds, he said, adding he did not expect the shutdown to cause prices of U.S bonds or stocks to move sharply, Reuters reported.
Meanwhile, the S&P/ASX 200 index traded 0.17 percent lower at 5,955.50 by 03:40 GMT, while at 03:00GMT, the FxWirePro's Hourly AUD Strength Index remained slightly bullish at 76.97 (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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