Australian bonds rise modestly in quiet trade; RBA policy decision in focus

The Australian government bonds were pushed modestly higher on Wednesday, alongside weakness in the equity market during a relatively quiet session that witnessed data of little significance.

Also, we foresee that the debt market will remain volatile ahead of the Reserve Bank of Australia (RBA) monetary policy meeting scheduled next week.

The yield on the benchmark 10-year Treasury note, which moves inversely to its price, fell 1 basis point to 2.003 percent, the yield on long-term 15-year note also dipped nearly 1 basis point to 2.369 percent and the yield on short-term 2-year slid 2-1/2 basis points to 1.587 percent by 04:10 GMT.

The Reserve Bank of Australia will hold its monetary policy meeting next week on October 4, announcing its decision at 03:30 GMT. We foresee that the central bank will remain concerned about persistently low inflation, but the strong housing market will keep policy on hold.

"We continue to expect the RBA to keep the cash rate on hold at the record low of 1.5%.  The trajectory of the AUD also remains important to the RBA’s deliberations, as well as labour and housing market data," said ANZ in a report to clients.

Lastly, investors will also remain keen to focus on the upcoming OPEC informal meeting this week in Algiers. It is uncertain that a deal can be reached on freezing or cutting output.

Meanwhile, the benchmark Australia's S&P/ASX 200 index traded 0.30 percent lower to 5,384.5 by 04:10 GMT.