The Australian bond market is slightly weaker after better than expected local employment data encouraged some investors to move into riskier assets.
Official data out on Thursday showed Australia's unemployment rate dropped to 5.6 per cent in September, which was lower than market expectations of 5.8 per cent.
However most economist attributed the surprise fall in unemployment to a 0.1 per cent drop to 64.9 per cent in the number of people participating in the workforce in September.
Commonwealth Bank fixed income quantitative strategist Philip Brown said bond prices fell after the surprisingly low jobless rate was released.
"The employment data was received reasonably well by the market," he said.
"Some of the details looked a bit questionable but the headline (unemployment rate) was seen as a positive."
Mr Brown said bond prices continued to fall during the afternoon.
At 1630 AEDT on Thursday, the December 10-year bond futures contract was trading at 95.875 (implying a yield of 4.125 per cent), down from 95.955 (4.045 per cent) on Wednesday.
The December three-year bond futures contract was at 96.850 (3.150 per cent), down from 96.890 (3.110 per cent).
Mr Brown said he expects that most of the market would not be expecting a solution on the US budget shutdown until it gets closer to October 17, the day that the US government is expected to hit its debt ceiling.
Most government departments have been closed since early last week when the Congress failed to get a budget bill passed.
"This kind of jittery but reasonably stable market will stay for a few days more," Mr Brown said."As you get closer to October 16 or 17 next week people will start to get a bit more scared."