Australian bond futures prices are higher following the release of weaker-than-expected retail spending figures.
UBS interest rate strategist Matthew Johnson said local bond futures contracts moved higher following the release of national retail figures for November at 1130 AEDT.
The Australian Bureau of Statistics figures showed retail spending fell 0.1 per cent in the month, well below economists' expectations of a 0.3 per cent rise.
Mr Johnson said futures weakened slightly following the rally, partly due to ongoing positive sentiment surround a recent rise in iron ore prices, but finished the day higher.
"The data hasn't been that great here but, of course, the iron ore price is high so that is where the battle is being fought in terms of the minds," he said.
Mr Johnson said the release of monthly jobs figures for December next Thursday and official inflation figures later in the month, would be the major local drivers of the bond market over the next few weeks.
At 1630 AEDT, the March 10-year bond futures contract was trading at 96.620 (implying a yield of 3.380 per cent), up from Tuesday's close of 96.600 (3.400 per cent).
The March three-year bond futures contract was at 97.220 (2.780 per cent), up from 97.170 (2.830 per cent) previously.