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Aust bonds close weaker

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AAP

2012-12-24

The Australian bond market has closed a shortened pre-Christmas session weaker in quiet trade.

At the end of trade at 1230 AEDT on Monday, the March 10-year bond futures contract was at 96.680 (implying a yield of 3.320 per cent), up from 96.695 (3.005 per cent) at Friday's close.

The March three-year bond futures contract was trading at 97.270 (2.730 per cent), down from 97.280 on Friday.

The local bond market opened marginally firmer, tracking the move on US Treasuries during weekend offshore trading, as traders followed the latest developments in the US over the looming budget deadline.

However, yields rose and prices fell during a quiet morning session, on the back of a positive start on local equity markets and a slightly encouraging tone from US President Barack Obama on the latest negotiations over the US fiscal cliff.

RBC Capital Markets fixed income strategist Michael Turner said there was little acitivity on the market ahead of the Christmas break.

"I don't know how many trades have been done but I would suggest not many," Mr Turner said.

Local debt futures markets will be closed on Christmas Day and Boxing Day before reopening on Thursday.