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Title : Australia’s 10-year Treasury yields drop below 3.30% after downbeat Wage Price Index


Aug 17, 2022 1:51:52 AM ET

By:AnalysisWatch


The run on Australian Treasuries intensified after the country released a lackluster wage price index for the second quarter (Q2). Yields also take cues from prevailing fears in Australian equity markets.


That said, benchmark 10-year Treasury yields took bids to refresh the intraday low near 3.276% during Wednesday's Asian session.


Australia's second-quarter wage price index rose 0.7% on a year-over-year basis, while missing expectations by 0.8%. In addition, the year-on-year figures also fell below market expectations from 2.7% to 2.6%, down from 2.4% year-on-year previously.


On the other hand, gains in mining stocks should have helped Australian equity traders, despite a sharp drop in biomedical giant CSL Ltd.


Reuters reported that the Reserve Bank of Australia's minutes mentioned that the board expects to take further steps in normalizing monetary conditions in the coming months but is not on a preset path.


It should be noted that China's willingness to take multiple measures to curb recessionary woes failed to convince markets that the dragon nation could avoid an economic slowdown. Also fueling the flight to safety are signals from Europe to renew the nuclear deal with Iran, while plans to shut down Germany's last three nuclear power plants are delayed.


In the same vein, the Washington Post (WaPo) reported that Chinese authorities ordered factories to suspend production in several major manufacturing regions to preserve electricity as the country faces the worst heat wave in six decades.


More broadly, caution ahead of July US retail sales, which are expected to fall 0.1% versus 1.0% in June, as well as the minutes of the Federal Open Market Committee (FOMC) meeting, weighed on market sentiment and Australian Treasury bond yields.

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