Australian bond futures prices are higher following disappointing US manufacturing data.
The Institute for Supply Management's purchasing managers' index showed US manufacturing sector growth slowed sharply, dropping to 51.3 from 56.5 in January.
The report created doubt over the US economic recovery, ANZ economists said.
"US Treasuries rallied strongly overnight after the release of the disappointing US manufacturing report which spurred concerns over the resilience of the US economic recovery," the economists said.
"Australian bond futures also rallied but underperformed US Treasuries."
At 0830 AEDT on Tuesday, the March 2014 10-year bond futures contract was trading at 96.105 (3.895 per cent), up from 96.065 (3.935 per cent) on Monday.
The March 2014 three-year bond futures contract was at 97.180 (2.820 per cent), up from 97.130 (2.870 per cent).