Australian bonds slump on hopes of hawkish RBA policy statement

The Australian bonds slumped on the first trading day of the week Monday as investors hope to witness a hawkish tone form the Reserve Bank of Australia (RBA) in its monetary policy statement, scheduled to be held on October 3 by 03:30GMT.

The yield on the benchmark 10-year Treasury note, which moves inversely to its price, jumped 4 basis points to 2.83 percent, the yield on the 15-year note also urged 4 basis points to 3.16 percent and the yield on short-term 2-year traded 3-1/2 basis points higher at 2.00 percent by 03:25GMT.

The Reserve Bank of Australia is likely to stand pat once again. Policymakers may appear somewhat more upbeat about the economy, but may also reiterate their exchange rate concerns.

RBA board member Ian Harper said economic growth isn't strong enough to justify an interest-rate increase and policymakers can do little but look on as the Aussie dollar appreciates.

Meanwhile, the S&P/ASX 200 index climbed 0.76 percent to 5,727.50 by 03:30 GMT, while at 02:00GMT, the FxWirePro's Hourly AUD Strength Index remained highly bearish at -119.48 (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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