Australian bond futures prices have weakened, as global growth sentiment lifts, and as investors put their money into European bond markets.
At 1630 AEDT on Friday, the December 10-year bond futures contract was at 96.780 (implying a yield of 2.220 per cent), down from 96.830 (3.170 per cent), on Thursday.
The December three-year bond futures contract was trading at 97.260 (2.740 per cent), down from 97.320 (2.680 per cent).
CMC markets chief market strategist Michael McCarthy said strong Chinese manufacturing data released on Thursday had given a boost to economic sentiment around the world.
"It speaks to a better growth outlook in China," he said.
"And it also speaks to a better global environment, which of course makes the safe haven status, which has driven so much of the rally over the past few months, less attractive."
HSBC's Chinese Purchasing Managers' (PMI) Index rose to 50.4 in November, from 49.5 a month earlier - putting it in expansionary territory for the first time in 13 months.
Mr McCarthy added that European bond markets had rallied overnight, showing increased expectation that the Greek debt problem would be resolved.
"There appears to be greater confidence in the bond markets in Europe at the moment," he said.
"That might be attracting some global flows away from the US and Australia at the moment."