Australian government bonds slumped on Wednesday ahead of the FOMC last policy decision later in the day. Also, November employment report will in investors focus.
The yield on the benchmark 10-year Treasury note, which moves inversely to its price, rose 2 basis points to 2.553 percent, the yield on the long-term 30-year note climbed 3 basis points to 3.298 percent and the yield on short-term 2-year surged 3 basis points to 1.865 percent by 02:40 GMT.
The U.S. Treasury curve saw the mixed performance on Tuesday during a relatively quiet session as markets await the December FOMC statement on Wednesday. However, it helps to add a greater focus on the November CPI release on Wednesday, expected to show maintained support on a y/y basis for both headline and core readings.
Beyond the December meeting, we expect there to be increased debate over the timing of future rate increases in 2018 as leadership at the Fed becomes more established. Hence, we expect forward guidance to be more muted (particularly during Fed Chair Yellen's post-statement press conference).
On the other hand, the investors will also look forward to the Thursday’ employment report from the Australian Bureau of Statistics, where employment is expected to grow 19.2K in November, up from October’s 3.7K along with steady unemployment rate at 5.4%.
Meanwhile, the S&P/ASX 200 index traded flat at 6,020.5 by 02:40 GMT, while at 02:00GMT, the FxWirePro's Hourly AUD Strength Index remained neutral at +37.10 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex
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