Australian 10-year bond yield hit highest since November following heavy sell-off in U.S. Treasuries

Australian bonds plunged on Friday as investors cashed in profits ahead of the ahead of the long Christmas holiday weekend. Also, U.S. Treasury yields held steady overnight with the 10-year yield close to a 9-month peak.

The yield on the benchmark 10-year Treasury note, which moves inversely to its price, rose 4 basis points to 2.713 percent, hitting highest since November, the yield on the long-term 30-year note surged over 4 basis points to 3.443 percent and the yield on short-term 2-year climbed 3 basis points to 2.014 percent by 03:30 GMT.

The U.S. Treasuries saw mixed performance overnight as short-end selling was contrasted by upward pressure further out the curve. With respect to data, markets received a mixed bag of numbers, highlighted by solid improvement in Philadelphia Fed manufacturing, contrasted by a +20k increase in initial jobless claims and modest downward revisions in final 3Q17 GDP data to 3.2 percent.

The Republican-controlled U.S. House of Representatives gave final approval to the biggest overhaul of the U.S. tax code in 30 years overnight, sending a sweeping $1.5 trillion bill to President Donald Trump for his signature. Many investors expect that tax cuts will help spur investment and spending that will, in turn, boost the economy and increase stubbornly low inflation, Reuters reported.

On the other hand, the RBA’s policymakers in the meeting minutes released this week said that recent data had increased confidence that there would be further progress on fronts such as unemployment, inflation and household debt in 2018. The central bank added that wage growth appeared to have stabilized at a low rate and is expected to pick up over time. In addition, data suggested above-average jobs growth in next few quarters and output growth is still expected to pick up gradually.

The central bank said that the outlook for household consumption continued to be a significant risk given that household incomes were growing slowly and debt levels were high. They left the continued fret that an appreciating exchange rate would be expected to result in a slower pick-up in domestic economic activity and inflation than currently forecasted.

Lastly, markets now look ahead to what stands to be a relatively quiet Friday session ahead of the long Christmas holiday weekend, highlighted by personal income/spending, durable goods orders, new home sales and University of Michigan consumer sentiment releases.

Meanwhile, the S&P/ASX 200 index traded 0.25 percent lower at 6,025.5 by 03:30 GMT, while at 03:00GMT, the FxWirePro's Hourly AUD Strength Index remained slightly bullish at +88.73 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex

FxWirePro launches Absolute Return Managed Program. For more details, visit http://www.fxwirepro.com/invest