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AAP

2012-11-09

Australian bond futures prices are higher, as markets remain concerned about the US economy.

At 1630 AEDT on Friday, the December 10-year bond futures contract was trading at 96.975 (implying a yield of 3.025 per cent), up from 96.925 (3.075 per cent) on Thursday.

The December three-year bond futures contract was at 97.430 (2.570 per cent), up from 97.390 (2.610 per cent).

Commonwealth Bank head of debt research Adam Donaldson said the bond market had moved little on the day, following a stronger performance last night, as investors mulled over the results of US election.

"Last night we had a continuation of the negative performance in stock markets," he said.

"That's lending a bid tone to markets, so bond prices have been higher."

Mr Donaldson said investors were concerned about how returned president Barack Obama would deal with the looming fiscal cliff, and how it would impact the US economy.

However, commentary from the Reserve Bank of Australia (RBA) on Friday had pushed bond prices down slightly.

"They downgraded their growth forecasts, but that was expected," he said.

"The market has come back somewhat from its highs, since the tone of their statement was more balanced."

In its Statement on Monetary Policy, the RBA said it expected gross domestic product (GDP) growth to fall to three per cent in 2013, down from 3.75 per cent in 2012.

It had previously forecast GDP growth of 2.75 to 3.25 per cent in 2013.