Global sentiment lifts Aust bond prices
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Australian bond futures prices have risen as part of a global shift towards safe haven assets.
Commonwealth Bank interest rate strategist Phillip Brown said there had been a rise in demand for safe haven assets such as Australian bond futures in the wake of the US presidential election.
"Basically after the euphoria of the election people have had a look around and realised that not much has changed over there. Greece is still a mess and Spain is still not asking for a bailout," he said.
A major concern on markets is the so called `fiscal cliff' of tax increases and spending cuts due to come into effect in the US in early 2013.
If re-elected President Barack Obama and the Republican controlled House of Representatives cannot find an alternative solution to bring down the country's debt it is feared the US will fall back into recession.
Mr Brown said the release of National Australia Bank's business survey, which showed a further drop in both confidence and conditions in October, also helped push prices higher on Tuesday.
He said traders would be watching the release of quarterly wage price data by the Australian Bureau of Statistics on Wednesday.
"If that figure surprises it might have an impact."
Economists expect the data to show a 0.8 per cent rise in wages in the September quarter.
At 1630 AEDT on Tuesday, the December three-year bond futures contract was at 97.490 (implying a yield of 2.510 per cent), up from 97.460 (2.540 per cent) on Monday.
The December 10-year bond futures contract was trading at 97.025 (2.975 per cent), up from 97.005 (2.995 per cent).