Australian bond futures prices are lower, after the US central bank did not deliver on expectations of stimulus for the world's largest economy.
At 1630 AEST on Thursday, the September 10-year bond futures contract was trading at 96.940 (implying a yield of 3.060 per cent), down from 96.970 (3.030 per cent) on Wednesday.
The September three-year bond futures contract was at 97.390 (2.610 per cent), down from 97.440 (2.560 per cent).
Commonwealth Bank interest rate strategist Phillip Brown said that despite the release of positive trade and retail data in Australia, it was a meeting of the US Federal Open Market Committee (FOMC) which drove bond prices down on Thursday.
"If you look at the intraday movement, the three-year bond price had already moved about seven basis points before the data came out this morning," he said.
"The move was in response to the FOMC meeting - there was a sell-off in most markets, including the Dow Jones."
The market had expected that the FOMC might announce economic stimulus at its policy meeting, but it just acknowledged a growth slowdown, and suggested that quantitative easing could happen later.
Data released on Thursday by the Australian Bureau of Statistics (ABS) showed that retail trade had risen 1.0 per cent in June - higher than the market expectation of 0.6 per cent.
Other ABS data showed Australia returning to a trade surplus in June.
Mr Brown said the market was eagerly anticipating another central bank meeting - of the European Central Bank - on Thursday night.
"It's one of the most unpredictable events I've ever had to predict," he said.
"We're slightly concerned that because (ECB president) Mario Draghi has talked this up so much, it's going to be hard for them to meet expectations."
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