Aussie bonds slip further following Chinese trade data earlier
Australia 10-year bond yields are up by 7 basis points on the day, as bonds sold off following the Chinese trade data earlier. I highlighted here why that would be good for the aussie.
But adding to the feel-good factor for the aussie is that yields are coming back up. After bottoming out in late March, it's risen back to 2.736% on the day and if it's any consolation it is helping to narrow the yield spread between Australia and US bonds - currently -0.09 basis points after falling to almost -0.20 basis points in March.
And looking at the correlation between Aussie yields with AUD/USD, the turnaround in the currency pair is very much related to the turnaround in yields and their movement have been rather similar over the past year:
