Australian bond futures prices are lower following a quiet day of trading.
Local bond futures followed US Treasuries lower on Thursday night but UBS interest rate strategist Matthew Johnson said they traded in a narrow range during Friday's local session.
"It hasn't done much, it has been a very quiet day," he said.
"There hasn't been any news."
Mr Johnson expected local bond futures to be well supported in the lead up to the Reserve Bank of Australia's February 5 board meeting.
He said consumer price index figures released on Wednesday, which showed headline inflation of 2.2 per cent in the year to December, meant the odds the RBA would cut the cash rate (currently three per cent) had increased.
The RBA has a target range for annual inflation of two to three per cent.
"I'm bullish at these levels, I think after the inflation numbers the RBA is more likely to cut rates than raise rates so I'd rather be long than short," Mr Johnson said.
At 1630 on Friday, the March 10-year bond futures contract was trading at 96.705 (implying a yield of 3.295 per cent), down from Thursday's close of 96.750 (3.250 per cent).
The March three-year bond futures contract was at 97.290 (implying a yield of 2.710 per cent), down from 97.330 (2.670 per cent).