The Australian bond market has closed stronger as weak economic data and a slumping equity market boosted safe-haven flows.
At 1630 AEDT, the yield on the Commonwealth Government March 2019 bond was at 4.130 per cent, down from Wednesday's close of 4.253 per cent, while the yield on the April 2012 bond was at 3.440 per cent, down from 3.548 per cent.
On the Sydney Futures Exchange, the March 10-year bond futures contract price was 95.850, up from Wednesday's close of 95.740, while the March three-year bond futures contract price was 96.560, up from 96.455.
The Australian bond market opened slightly weaker following offshore trade, but quickly reversed direction after figures showed the number of building approvals declined in November to their lowest levels in eight years.
CMC Markets market analyst David Taylor said the weak data raised the prospect of further aggressive interest rate cuts from the Reserve Bank of Australia (RBA).
"I don't think that any economic indicators that we have been given so far would suggest that we're out of the woods by any means," Mr Taylor said.
"I can't imagine the Reserve Bank would have any cause to relax just yet."
Most economists expect the RBA to lower the cash rate, which sits at 4.25 per cent, by at least 50 basis points when it meets in February.
"Our interest rates are still pretty reasonable. We are only just off neutral," Mr Taylor said.
"Over in the US, it's zero to a quarter of a per cent, and in the UK they are looking to push down towards 1.5 to two per cent."
A disappointing day on local equity markets also supported a rally on the local bond market: the benchmark S&P/ASX200 index closed down 2.26 per cent, while the broader All Ordinaries index ended down 2.27 per cent.
"The economic data that we had out today was pretty ordinary so there is absolutely no positive news for the market to go off at the moment," Mr Taylor said.
US president-elect Barack Obama was due to speak about his economic stimulus plan, valued at an estimated $US775 billion ($A1.09 trillion), during Thursday night's (AEDT) offshore session.
There also was more US employment data due in jobless claims for the week ending January 3.
The US Treasury was scheduled to sell $US16 billion in 10-year notes.
