Australia Markets closed

Aust bonds close fimer

The Australian bond market has ended the local trading day a touch firmer, with a lack of economic data and fresh news keeping prices and yields stuck in a tight range.

At 1630 AEDT on Tuesday, the March 10-year bond futures contract was trading at 96.575 (implying a yield of 3.425 per cent), up from Monday's local close of 96.560 (3.440 per cent).

The March three-year bond futures contract was at 97.190 (2.810 per cent), up from 97.160 (2.840 per cent) previously.

The local market opened on a positive note, having matched the move on US Treasuries during the overnight offshore session.

Nomura Australia rates strategist Martin Whetton said US Treasuries found support in a week where there was no new Treasuries being issued and the Federal Reserve was continuing to buy bonds.

"The biggest buyer in the world is buying all the paper," Mr Whetton said.

Figures which showed industrial production in the euro zone fell 0.3 per cent in November also gave a slight bid tone for fixed-income assets.

Following the offshore move, the Australian market drifted along in directionless trade during the local session.

"It has been a really quiet day," Mr Whetton said.

"We have got no news."

Mr Whetton said a speech by US Federal Reserve chairman Ben Bernanke had little impact on the market.

"There was nothing to react to," Mr Whetton said.

Dr Bernanke told the University of Michigan it was "very, very important" legislators in the US Congress raised the US government's borrowing limits, known as the debt ceiling.

During Tuesday night's (AEDT) offshore session, US retail sales figures for December, as well as business inventories data for November were due for release.

Mr Whetton said market players were also looking ahead to government bond auctions in Spain and Italy scheduled for later this week.