Australian bonds slump tracking U.S. counterpart after House of Representatives approves budget

The Australian bonds slumped, tracking similar movement in the U.S. Treasuries after the House of Representatives approved a budget, the first step toward tax reform. Investors also digested a slew of speeches from U.S. central bankers.

The yield on the benchmark 10-year Treasury note, which moves inversely to its price, jumped 3 basis points to 2.82 percent, the yield on the 15-year note climbed 3-1/2 basis points to 3.10 percent and the yield on short-term 2-year traded 1-1/2 basis points higher at 1.93 percent by 03:10GMT.

The House narrowly passed a USD4.1 trillion budget on Thursday, formally initiating a process that Republicans hope will result in the enactment of major tax reform later this year. By passing a budget resolution through both GOP-controlled chambers, Republicans would trigger a legislative process known as reconciliation, during which they could pass a sweeping tax reform bill with a simple majority of 51 votes in the Senate, instead of the usual 60-vote requirement.

In Missouri, San Francisco Fed President John Williams delivered the morning keynote address at the Community Banking in the 21st Century Research and Policy Conference in St. Louis, saying that he does not need to see inflation move higher to support another interest rate increase this year as long as other economic data points to continued economic strength, according to reports from Reuters.

Meanwhile, the S&P/ASX 200 index rose 0.12 percent to 5,675.50 by 03:10 GMT, while at 03:00GMT, the FxWirePro's Hourly AUD Strength Index remained neutral at -69.69 (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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