Australian bond futures prices are slightly higher despite the lack of market-moving data during the domestic session, which suggested a growing confidence in the global economy, traders said.
At 1630 AEDT on Tuesday, the June 10-year bond futures contract was trading at 95.770 (implying a yield of 4.230 per cent), up slightly from Monday's close at 95.765 (4.235 per cent).
The June three-year bond futures contract was at 96.310 (3.690 per cent), from 96.330 (3.670 per cent).
CMC Markets chief market strategist Michael McCarthy said the action over the past few nights has been contradictory as bond prices had fallen on Monday night and risen on Tuesday.
"On Friday night, we saw bonds rally along with risk assets - that's very unusual in the context of the last couple of years.
"What that suggested to me is that there was cash coming off the sidelines in all markets," he said.
"Last night was more regular in that we saw pressure on most bonds as most assets rallied."
Mr McCarthy said he expected bond yields to begin to rise in-line with growing confidence in the global economy.
"Looking at the chart of the Australian ten-year and US ten-year (bonds), it's quite clear that we've broken that long-term downtrend and are moving into a higher trading range in terms of yields and lower prices," he said.
"At the moment it seems as though we're seeing a corrective rally in what seems to be a medium-term uptrend for yields.
"I think we are looking at a gradual global recovery and what that means for US and Australian bond yields is that we'll see rising yields in broad terms over the next two years."
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