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Aust three-year bonds lower

Australian three-year bond futures prices are slightly lower following a sell off in US Treasuries.

JP Morgan interest rate strategist Sally Auld said US Treasuries were sold off overnight, despite a slide on global stock markets - which would normally increase demand for fixed income assets.

Local bond futures prices could fall further on Friday in the absence of any major economic data, she said.

"We could see the market weaker today and then maybe a bit of a relief rally on Monday," Ms Auld said.

The auction of $600 million of Australian government bonds on Friday could influence the market, while the upcoming expiry of the 10-year and three-year futures contracts on Monday would also have an impact, she said.

At 0830 AEDT on Friday, the December 10-year bond futures contract was at 96.770 (implying a yield of 3.230 per cent), the same level as on Thursday afternoon.

The December three-year bond futures contract was trading at 97.255 (2.745 per cent), down from 97.260 (2.740 per cent).