Australian bond futures prices have rallied despite the US Federal Reserve's tapering announcement, on concerns about emerging markets.
The Fed on Thursday morning (AEDT) said it would cut its monthly bond purchases by an additional $US10 billion, to $US65 billion, as the US economy continues to strengthen.
Good news about the US economy would typically see bond prices fall but they were instead boosted by concerns over emerging markets following rate hikes by the Turkish and South African central banks.
"US treasuries rose (yields fell) as weaker risk appetite and the concerns in emerging markets supported demand for safe-haven bonds," St George economist Janu Chan said.
"The fall in yields was despite the decision for the Federal Reserve to taper as the announcement was widely expected."
At 0830 AEDT on Thursday, the March 2014 10-year bond futures contract was trading at 96.055 (implying a yield of 3.945 per cent), up from 95.945 (4.055 per cent) on Wednesday.
The March 2014 three-year bond futures contract was at 97.170 (2.830 per cent), up from 97.070 (2.930 per cent).