Australian bond futures prices are lower on hints that Europe could be edging closer to a deal on Greece's debt bailout.
At 0830 AEDT on Thursday, the December 10-year bond futures contract was at 96.855 (implying a yield of 3.145 per cent), down from 96.880 (3.120 per cent), on Wednesday.
The December three-year bond futures contract was trading at 97.340 (2.660 per cent), down from 97.380 (2.620 per cent).
Commonwealth Bank interest rate strategist Phillip Brown said news from a meeting of finance ministers in Brussels had weakened bond prices overnight.
"Just at the end of our session yesterday, we got some news out of Europe," he said.
"It initially looked quite bad, because they said there wasn't going to be a deal, but then they explained that there wouldn't be a deal straightaway, but probably when they come back on Monday."
Eurozone finance ministers and the International Monetary Fund (IMF) had met to reach an agreement on the release of the latest instalment of a Greek rescue package, but failed due to disagreement over Greece's debt pile.
It's now hoped they will resolve the issue at a November 26 meeting.
Mr Brown said Chinese manufacturing data due on Thursday afternoon would be watched by investors, looking for clues to the mood of Australia's central bank.
"The RBA (Reserve Bank of Australia) has been talking about China in the last little while," he said.
"So, this will be an important data reading for us."
The RBA left the cash rate on hold at 3.25 per cent at its November 6 meeting. It next meets on December 4.