Australian bond futures prices have drifted lower following positive Chinese gross domestic product figures and ahead of Wednesday's local inflation data.
China's economy grew 7.7 per cent last year, according to official figures, beating economists' expectations of 7.6 per cent.
The positive Chinese data combined with caution ahead of Wednesday's consumer price index figures release was weighing on the Australian bond market, CMC Markets chief market strategist Michael McCarthy said.
Mr McCarthy said the market may also have been impacted by Monday's TD Securities/Melbourne Institute Inflation Gauge which rose sharply to 0.7 per cent in December.
"The China data confirms that growth is on track, keeping the potential for increases in inflation rather than decreases," Mr McCarthy said.
"The global growth scenario remains in tact, confirmed by yesterday's China numbers.
"Locally, the TD Inflation Index showed a bit of a spike in December so we will be watching very closely to see if that is reflected in tomorrow's official numbers.
"Ahead of that, it wouldn't be surprising if bond markets were a little cautious and we might see further pressure over the course of the day."
At 0830 AEDT on Tuesday, the March 2014 10-year bond futures contract was trading at 95.960 (implying a yield of 4.040 per cent), down from 95.970 (4.030 per cent) on Monday.
The March 2014 three-year bond futures contract was at 97.120 (2.880 per cent), down from 97.130 (2.870 per cent).