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Aust bonds firm after US election

Australian bond futures prices are higher after enthusiasm over by the resolution of the US election turned into concern over the nation's economic challenges.

At 0830 AEDT on Thursday, the December 10-year bond futures contract was trading at 96.945 (implying a yield of 3.055 per cent), up from 96.885 (3.115 per cent) on Wednesday.

The December three-year bond futures contract was at 97.420 (2.580 per cent), up from 97.350 (2.650 per cent).

The first economic challenge for newly re-elected US President Barack Obama is the expiry of tax and spending cuts at the end of 2012, referred to as "the fiscal cliff".

St George economist Janu Chan said traders moved into bonds overnight as market attention turned to how the president can deal with this task.

"If nothing is done, the fiscal cliff could easily send the US economy into recession," Ms Chan said.

"US treasuries rose (yields fell), supported by safe-haven demand.

"Following Obama's re-election, the prospect of ongoing bond purchases from the Federal Reserve may have has also placed some downward pressure on yields."

On Thursday, Australian employment figures for October will be released and the European Central Bank will hold its monthly meeting.