Australia 10-year bond yield rises to 1-week high ahead of FOMC policy decision

Australian government bonds slumped across the board on Wednesday ahead of the Federal Open Market Committee’s (FOMC) monetary policy decision, where the central bank is widely expected to keep its fed funds rate unchanged with a bias of further policy tightening.

The yield on Australia’s benchmark 10-year Note, which moves inversely to its price, rose 4-1/2 basis points to 2.704 percent, the yield on the long-term 30-year Note also jumped 4 basis points to 3.176 percent and the yield on short-term 2-year traded rose 2-1/2 basis points to 2.053 percent by 03:40 GMT.

In the United States, Treasuries remained little changed ahead of FOMC policy decision scheduled for Wednesday. The U.S. 10-year Treasury yield remained range bound at 2.970 percent.

"US government bond yields were little changed, with the yield curve flattening further overnight. The yield on the US 10-year government bond fell from 2.97 percent to 2.96 percent. The yield on the US 2-year government bond rose from 2.66% to 2.67 percent. The Federal Reserve is widely expected to leave interest rates on hold when it meets tonight," noted St. George Bank in its morning report.

On the other hand, it is worth noting that the RBA next meeting is scheduled for August 7, where the board members are expected to keep its interest rate unchanged at 1.50 percent.

Meanwhile, the S&P/ASX 200 index traded 0.19 percent lower at 6,224.5 by 03:50 GMT, while at 03:00GMT, the FxWirePro's Hourly AUD Strength Index remained slightly bearish at -76.59 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex