Australian bond futures prices have rallied on news Australia's unemployment rate rose to 5.4 per cent in December and weakness in Asian stock markets.
RBC capital markets fixed interest strategist Michael Turner said there had been strong demand for safe-haven investment like bonds during the local session on Thursday.
"We started the day off quite strongly and we haven't really looked back from there," he said.
Mr Turner said weaker Australian employment data and falls in Asian stock markets helped fuel the rally in bonds.
Figures released by the Australian Bureau of Statistics on Thursday showed Australia's unemployment rate rose to 5.4 per cent in December, from 5.3 per cent in November.
Meanwhile, the Shanghai's and Tokyo's share markets were both lower on Thursday afternoon.
Mr Turner said strong demand for Australian bond futures was likely to continue during the European and US sessions overnight.
At 1630 AEDT on Thursday, the March 10-year bond futures contract was trading at 96.735 (implying a yield of 3.265 per cent), up from Wednesday's close of 96.665 (3.335 per cent).
The March three-year bond futures contract was at 97.310 (2.69 per cent), up from 97.240 (2.760 per cent) previously.