Unlike the unstable share market, the bond market shows strength on Monday with the December 10-year bond futures contract slightly increased to 94.870 from Friday's close of 94.850.

The December three-year bond futures contract went up to 95.180 from its previous close of 95.160.

ICAP economist Adam Carr said Australian bonds weakened earlier over the weekend offshore session. “Overall, we're down about three ticks, but there were a couple of positive earnings reports coming out of the US,” Carr said.

Bonds firmed into the Asian open because the mixed concerns “over whether Ireland was requiring a bail out... were unsubstantiated claims.”

However, Carr forecast weakness in Australian bonds during the Asian session as investors await the speech by Reserve Bank of Australia (RBA) governor Glenn Stevens about Monetary Policy and the Regions at 1:30 p.m. AEST.

According to Carr, “the data is pretty clear that household consumption is robust... whatever the case, the RBA are not going to be downgrading their view. I think our bonds will sell off today.”

Earlier, the Australian Office of Financial Management (AOFM) announced the syndicated offering of a new 2.5 percent 20 September 2030 Treasury Indexed Bond. The said bond has been priced at a real yield to maturity of 2.66 percent which is equivalent to a gross price of $97.540 per $100 face value of the bond.

Settlement of the issue is scheduled tomorrow.