Late this afternoon, market pricing for a November rate hike from the Reserve Bank of Australia surged to 60 per cent from 30 per cent after the data, with the market even likely to increase those odds in the next 24 hours, said Su-Lin Ong, senior interest rate strategist with RBC Capital Markets.
"It is quite possible that it could move further as into tomorrow, the risk is to the upside," said Ms Ong, citing a speech tomorrow by historically hawkish RBA Deputy Governor Ric Battellino.
Still, longer term, Ms Ong said late-October Australian inflation data and the US jobs report late tomorrow, could limit any more broad gains in rate-hike odds or big slides in bond prices.
In the interest-rate futures market, the three-year bond lost 14 ticks to 95.02, while 10-year bond futures lost four ticks to 94.925.
The Aussie dollar rose after official data showed the unemployment rate stayed steady at 5.1 per cent during September.