Bonds up on fiscal cliff concerns
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Australian bond futures prices are slightly higher on increased concerns United States politicians will not negotiate a resolution to the so-called fiscal cliff.
At 0830 AEDT on Thursday, the March 10-year bond futures contract was at 96.660 (implying a yield of 3.340 per cent), up from 96.630 (3.370 per cent) at Wednesday's close.
The March three-year bond futures contract was trading at 97.240 (2.760 per cent), up from 97.220 (2.780 per cent).
RBC fixed income strategist Michael Turner said concerns about the US government's ability to avoid the fiscal cliff - a series of tax rises and spending cuts due to begin in 2013 - had impacted bond prices.
"US stocks were down last night because of concerns around the fiscal cliff, so then our bonds pushed up again," he said.
"The cliff is pretty much all we've got to look forward to, in terms of news in the next few days."
Earlier, bond prices were lower due to an improved reading for business confidence in Germany.
The Ifo Institute survey rose to 102.4 in December, from 101.4 the month before, indicating that businesses are less pessimistic as they head towards the end of the year.