Australia Markets closed

Bonds higher ahead of economic data

Australian bond futures prices are slightly higher ahead of the release of several pieces of local economic data.

At 0830 AEDT on Monday, the December 10-year bond futures contract was at 96.920 (implying a yield of 3.080 per cent), up from 96.915 (3.085 per cent) on Friday afternoon.

The December three-year bond futures contract was trading at 97.390 (2.610 per cent), up from 97.380 (2.620 per cent).

UBS interest rate strategist Matthew Johnson said the Australian bond market had hardly moved over the weekend, but would have plenty of local economic events to shape it this week.

"It moved up on Friday, and then went sideways relative to our close," he said.

"I guess the judgement is where it will go from here - there's a lot of data which will be instrumental in figuring that out.

"It also comes down to predictions for the RBA (Reserve Bank of Australia) meeting."

Official retail trade and business indicator numbers will be released on Monday, along with private surveys for job advertisements, manufacturing, inflation and business expectations.

On Tuesday, the RBA will meet to decide its rate position for December - most economists surveyed by AAP expect a cut by 0.25 per cent to the cash rate, which is currently 3.25 per cent.

"I think we will trade firmly throughout the session today," Mr Johnson said.

"I think three-year bonds will outperform 10-years mildly."