“Australia’s bonds fell, pushing the benchmark 10-year yield up by the most in two weeks, after data showed economic growth in China exceeded economist estimates, supporting export prospects.
The rate on the three-year note also posted its biggest one-day advance in two weeks amid gains in Chinese industrial production and retail sales, boosting bets the Reserve Bank of Australia will keep borrowing costs unchanged when officials meet next month. New Zealand’s currency, known as the kiwi, weakened following a report that showed an unexpected drop in the nation’s consumer prices.
“All signs point to a modest pickup in Chinese growth towards the end of the year,” said Michael Turner, a fixed- income strategist in Sydney at Royal Bank of Canada. “It probably suggests the RBA will be comfortably on hold to February, if not March, which should keep the upward bias to yields in the near-term.”
Australia’s 10-year yield rose 12 basis points, or 0.12 percentage point, to 3.41 percent at 5:01 p.m. in Sydney, the biggest advance since Jan. 2. The rate on three-year securities climbed 10 basis points to 2.81 percent, also the largest increase since Jan. 2.
The Australian dollar fell 0.2 percent to $1.0522 and was little changed at 94.76 yen. Its New Zealand counterpart dropped 0.1 percent to 83.57 U.S. cents and rose 0.1 percent to 75.26 yen.
Chinese Growth
Gross domestic product in China, Australia’s biggest trading partner and New Zealand’s second-largest export destination, rose 7.9 percent in the fourth quarter from a year earlier, according to a report today by the National Bureau of Statistics. That compared with the 7.8 percent median estimate in a Bloomberg News survey and a 7.4 percent gain in the previous period.
Industrial output in December rose a more-than-expected 10.3 percent from the prior year, while retail sales climbed 15.2 percent….”
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