Australian bond futures prices are firmer despite business conditions rising to the best levels in three years.
The local market initially weakened after National Australia Bank monthly business survey showed confidence rising in December by seven points to +4 points.
But the falls in futures prices were shortlived with futures prices rising during afternoon trade, NAB head of research Peter Jolly said.
"They initially responded and went down for a couple of hours, made their lows and now they're back to be unchanged for the day," he said.
An improvement in business conditions makes another interest rate cut less likely.
At 1635 AEDT on Tuesday, the March 2014 10-year bond futures contract was trading at 96.035 (implying a yield of 3.965 per cent),up from 96.010 (3.990 per cent) on Friday.
The March 2014 three-year bond futures contract was at 97.160 (2.840 per cent), up from 97.150 (2.850 per cent) on Friday.