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SYDNEY, Jan 21 AAP

January 21 2013, 4:46PM

Australian bond futures prices are higher after rebounding from Friday's selloff in a quiet day of trading.

At 1630 AEDT on Monday, the March 10-year bond futures contract was trading at 96.665 (implying a yield of 3.335 per cent), up from Friday's close of 96.610 (3.390 per cent).

The March three-year bond futures contract was at 97.240 (implying a yield of 2.760 per cent), up from 97.190 (2.810 per cent).

UBS interest rate strategist Matthew Johnson said futures prices rallied on Friday night but lost some ground during Monday's local session.

"It (the market) has been led down today by US Treasury notes, so its more of a global thing than a local thing," he said.

Mr Johnson said there had been little in the way of economic news to drive the recent movements but said the market may be more volatile due to lower trading volumes in recent weeks.

"I think it maybe just reflects that we are range trading here and markets can move a bit on not a great deal of volume,"he said.

He said the key local event, this wee, would be the release of consumer price index figures (CPI) on Wednesday, which will influence the Reserve Bank of Australia's February interest rate decision.

"My guess is that if we get a low CPI we can get a bit of a rally," Mr Johnson said.