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Market News Australia's Treasury bond rates are anticipating their greatest weekly decline in a decade

Australia's Treasury bond rates are anticipating their greatest weekly decline in a decade

Aussie bond buyers maintain reins as traders await RBA's Lowe. The yield on 10-year bonds falls to its lowest level in eight years, ending a four-week upswing. The 3-year Treasury yield has reversed from its highs in late 2011 and is on track to achieve its worst weekly drop in 11 years. Australian statistics and a hawkish RBA fail to support bond purchases amid recession worries.

Alina Haynes
2022-06-24
975

截屏2022-06-24 上午9.40.00.png 

 

Australian bond markets mimic global trends to entice bulls as economic slowdown concerns intensify. The probable hawkish remarks by Reserve Bank of Australia (RBA) Governor Philip Lowe, scheduled for release at 11:30 GMT on Friday, also kept Aussie bond purchasers optimistic.

 

Nevertheless, Australia's 10-year Treasury bond rates continue to retreat from their highest levels since 2014, despite daily increases of 1.0 percent around 3.71 percent.

 

Moreover, the 3-year equivalent is projected to see the most weekly loss since 2011 with a drop of over 11 percentage points to 3.31 percent as of press time.

 

"This month, Australia's bonds have oscillated wildly after the Reserve Bank of Australia (RBA) boosted rates more than experts anticipated and Governor Philip Lowe stated that officials would do whatever was required to reduce inflation," Bloomberg explained.

 

It should be noted, however, that worries of a worldwide recession are now significant enough to weigh on market sentiment and Treasury yields.

 

Australia's risk aversion disregards positive domestic PMIs as well as worse US activity indicators, not to mention China's lately positive traffic data. Nevertheless, the early readings of Australia's S&P Global PMIs for June were mixed, with the Manufacturing and Services PMIs exceeding market expectations and earlier readings, but the Composite PMI falling below the prior readings. The Manufacturing PMI increased to 55.8 from 54.7 predicted and 55.7 before, while the S&P Global Services PMI increased from 49.1 to 52.6 from 53.2 previously. Notably, the Composite PMI decreased below 52.9 to 52.6 in June.

 

Notably, RBA's Lowe is anticipated to repeat his hawkish view, especially in light of the recent improvement in Aussie PMIs, which might benefit Aussie bond purchasers and weigh on rates. However, statements on the economic downturn might be counterproductive to the actions.


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