Australian bonds slump following progress over U.S. tax bill; RBA December meeting minutes in focus

Australian bonds slumped on Monday ahead of the Reserve Bank of Australia December meeting minutes, which is scheduled to be released on December 19 at 00:30 GMT. Also, bonds witnessed a sharp sell-off on a positive note following U.S. Republican's agreement on the shape tax cuts aimed at boosting growth in the world’s largest economy.

The yield on the benchmark 10-year Treasury note, which moves inversely to its price, rose 3-1/2 basis points to 2.567 percent, the yield on the long-term 30-year note surged 3 basis points to 3.282 percent and the yield on short-term 2-year climbed over 3 basis points to 1.929 percent by 03:00 GMT.

Minutes from the RBA’s last board meeting of 2017 is expected to be consistent with the view that the central bank will remain optimistic about the outlook, but avoid any imminent rate hike hint anytime soon.

On the other hand, mid-week votes in the House and Senate are planned on the legislation that will reduce corporate and individual tax rates. Lawmakers are aiming for the bill to land on President Donald Trump’s desk for a signature before Christmas, Bloomberg reported.

Markets now look ahead to a greater flow of data in the week ahead from the United States, highlighted by housing starts/building permits, final GDP revisions and durable goods orders data.

Meanwhile, the S&P/ASX 200 index traded 0.56% higher at 5,988.5 by 03:00 GMT, while at 02:00GMT, the FxWirePro's Hourly AUD Strength Index remained neutral at +37.10 (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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