Australia’s benchmark 10-year government bond yield dropped to a one-month low before Federal Reserve Chairman Ben S. Bernanke begins a second day of testimony following remarks that signaled no imminent exit from stimulus that has helped inflate asset prices across the world.
The Aussie dollar fell for a second day after a report showed Australian businesses turned pessimistic about near-term prospects, adding to the case for an interest-rate cut by the Reserve Bank. New Zealand’s kiwi dollar dropped for the first time in four days after a report showed consumer confidence weakened. Both currencies slumped after the International Monetary Fund said risks are increasing that China’s economic growth this year will fall short of the lender’s forecast.
“Australian bond yields are following U.S. Treasuries lower and also reflecting concern about Chinese growth and the RBA, given rising unemployment in Australia,” said Damien McColough, the head of fixed-income research at Westpac Banking Corp. (WBC) in Sydney.
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