Australia 10-year Treasury yields drop the most in a week post RBA bond tapering news
- Aussie bond yields react to the RBA’s tapering announcements.
- AUD/USD reverses RBA-led gains amid cautious rate statement.
Australia’s 10-year Treasury yields drop 1.65% on a day to 1.255% by the press time during early Tuesday. The bond coupons justify the Reserve Bank of Australia’s (RBA) tapering news.
In its September meeting, the RBA matches wide market expectations of keeping the benchmark rate unchanged at 0.1% but surprised traders while unveiling the details of how to go ahead with consolidation of the weekly bond purchases.
Read: AUD/USD leaps towards 0.7500 as RBA goes ahead with tapering plans
As market players anticipated the halt in the RBA’s tapering plans, surprise news from the Aussie central bank propelled AUD/USD prices and the bonds, before the Aussie currency’s latest drop to refresh intraday low.
It should, however, be noted that the US 10-year Treasury yields remain firmer around 1.34%, up two basis points (bps), portraying a major gap and favors AUD/USD sellers.
That said, comments from the rate statement have been downbeat as policymakers do expect a downtick in the Q3 GDP due to the virus-led activity restrictions.
Moving on, the return of the US and Canadian traders will be the key to follow for near-term AUD/USD moves whereas chatters concerning the ECB and COVID-19 could offer intermediate directions.