Australian bond futures prices are weaker as a sharp rise in Turkish interest rates to shore up its currency boosts global risk sentiment.
The Turkish central bank's decision to raise its overnight lending rate from 7.75 per cent to 12 per cent hit demand for safe haven assets like bonds, ANZ interest rate strategist Zoe McHugh says.
"There seems to be a bit more risk-on appetite in the market today after the information overnight about Turkey," she said.
"It seemed to provide a bit of relief to the market."
Bond markets are also weaker as the US Federal Reserve's Federal Open Market Committee's two-day policy meeting decides whether to taper its stimulus measures again.
"That's largely priced into the market but we have seen a very big move in the US 10-year-bond yield and that has been selling off today and will probably help lift our bond yield and contribute to the weakness in the market," Ms McHugh said.
Meanwhile, the Australian government sold $800 million worth of April 2024 Treasury bonds on Wednesday, attracting bids totalling $2.078 billion.
At 1630 AEDT on Wednesday, the March 2014 10-year bond futures contract was trading at 95.945 (implying a yield of 4.055 per cent), down from 96.035 (3.965 per cent) on Tuesday.
The March 2014 three-year bond futures contract was at 97.070 (2.930 per cent), down from 97.160 (2.840 per cent).