Australian bond futures slipped slightly, while the Australian dollar strengthened against the US dollar, following hawkish-sounding remarks from Reserve Bank of Australia Governor Michele Bullock during her testimony before an Australian parliamentary committee.

Bullock indicated that upside risks to inflation are becoming apparent and that the central bank needs to assess whether previous rate hikes have been sufficient to tame price pressures.

In response, traders are now leaning toward fully pricing in a 25-basis-point rate increase at the RBA's upcoming policy meeting later this month.