The Australian government bonds rallied on Tuesday as investors wary after recent four polls suggested Britain is on course to leave the European Union.
The yield on the benchmark 10-year Treasury note, which moves inversely to its price fell more than 3 basis points to 2.078 percent, super-long 15-year bonds yield dipped 3-1/2 basis point to 2.312 percent and the yield on short-term 2-year bond slid nearly 4 basis points to 1.635 percent by 05:25 GMT.
Following the global debt market, the benchmark 10-year US Treasury note yield seen marching lower towards 1.60 percent mark. German 10-year bund yields continue to hover at record low, after testing its 2015 low of 0.05 percent last week, are likely to test zero soon as investors remained cautious ahead of the Federal Reserve meeting and Britain’s referendum. The 15-year JGB yield dip below zero for the first time, it is down at -0.001 percent and the benchmark 10-year JGB yield hit a fresh all-time low of -0.162 percent.
The recent polls showed the outcome of the referendum is too close to call, raising the possibility that Britain might leave the EU after 43 years of membership in the bloc. A recent poll on Brexit by YouGov, showed 46 percent in favour of Leave while 39 percent wanted to Remain, rest being indecisive.
Further, a new UK poll on the EU by ICM for the Guardian shows a 6% lead for the Leave side (53-47 percent), when undecided of 6-7 percent were excluded. Reportedly the results were the same for polls conducted online and by phone. This contrasts with prior rumours of a similarly-sized pro-Remain balance.
Looking ahead, Bank of Japan Governor Haruhiko Kuroda will make a decision on stimulus on June 16 and the Federal Open Market Committee (FOMC) gathering scheduled for June 14-15. The U.K. decision on whether to remain in the European Union on June 23 is also weighing on investors’ minds.
Markets will remain keen to focus on unemployment rate on Friday at 01:30 GMT. Meanwhile, the benchmark Australia's S&P/ASX 200 index was trading down 0.05 percent, or 2.5 points, at 5,164.5 by 05:25 GMT.
The material has been provided by InstaForex Company – www.instaforex.com