Australian bond futures are marginally higher after weakness in US stock markets offset positive sentiment in Europe.
Commonwealth Bank interest rate strategist Phillip Brown said local bond futures initially fell overnight, (Tuesday night into Wednesday AEST), after euro zone finance ministers agreed to provide Spain with 30 billion euros ($A36.41 billion) to support its troubled banking system.
However, he said, falls in US stock markets had pushed bond prices higher.
"We had moves in opposing direction. The Europeans were getting a bit more confident but the US was getting less confident," he said on Wednesday.
"All up, we decided that was about square and have moved practically zero."
Mr Brown said the auction of $1 billion in Australian government bonds on Wednesday morning would likely see bond futures loose ground.
"There is almost definitely going to be a bit of a sell-off to make room for that billion dollars coming into the market."
At 0830 AEST on Wednesday, the September 10-year bond futures contract was trading at 97.110 (implying a yield of 2.990 per cent), up from 97.105 (2.895 per cent) on Monday.
The September three-year bond futures contract was at 97.710 (2.290 per cent), up from 97.700 (2.300 per cent).
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