Australia Treasury bond yields trace global peers to grind higher ahead of Aussie inflation

• Australian Treasury bond yields remain firmer two-day rebound from the lowest levels since August 2022.
• Downbeat Aussie Retail Sales contrast, review of how global banking crisis affects Australia prods bond buyers.
• Australia's Monthly CPI is expected to ease to 7.2% YoY in February, suggesting more hardships for RBA hawks.

Australia bond markets continue witnessing the week-start buying as traders brace for the key Aussie Monthly Consumer Price Index (CPI) data for February on early Wednesday.

That said, the benchmark 10-year Australia Treasury bond yields seesaw around 3.53% after posting a two-day recovery from the lowest levels since August 2022, marked on the last Friday. On the same line, the two-year counterpart pokes the 3.10% level during its third consecutive day of rebound.

While tracing the clues of the latest recovery in the Aussie bond coupons the looming fears of a financial market check in Australia and downbeat Retail Sales gain major attention. However, the macro risk-on mood supersedes the woes amid the month-end positioning.

Talking about the Aussie data, the seasonally adjusted Retail Sales growth for February came in at 0.2% versus 0.4% market forecasts and 1.9% prior.

Alternatively, news that Australian Treasurer Jim Chalmers will convene a meeting of the country's top financial regulators to check how the latest volatility in global financial markets could affect the country, an official in the treasurer's office said on Tuesday per Reuters, prod the optimism. On the same line could be the much-debated $5.4 million Credit Default Swap (CDS) trade of Deutsche Bank.

Moving on, Aussie bond traders will keep their eyes on the Monthly CPI for February, expected 7.2% YoY versus 7.4% prior, as downbeat Retail Sales and recently softer talks of the Reserve Bank of Australia (RBA) suggest a pause in the rate hike trajectory.

Also read: AUD/USD bulls attack 0.6700 with eyes on Australia inflation data, banking news