Bond yields traded higher on Monday after the federal budget showed the gross borrowing for the next fiscal year was above market estimates, but hopes of a rate cut by the central bank capped the upmove.
In the global market, U.S. Treasury yields curve flattened the most in 11 weeks on concern US President Donald Trump’s move to unleash tariffs on top trading partners may push the economy into stagflation. Furthermore, Oil prices jumped on Monday after U.S. President Donald Trump imposed tariffs on Canada, Mexico and China, raising fears of crude supply disruption from the two biggest suppliers to the U.S., but the prospect of lower fuel demand capped gains.
Back home, the yields on new 10 year Government Stock were trading 9 basis points higher at 6.78% from its previous close of 6.69% on Friday.
The benchmark five-year interest rates were trading 9 basis points higher at 6.71% from its previous close of 6.62% on Friday.