The Australian bond market closed firmer as the highest US jobless rate in 16 years sparked worries about a prolonged recession in the world's biggest economy.

Local bonds are expected to be well bid this week as investors speculate that data will show unemployment rose in December, with a dire employment advertisements report out Monday adding to already-strong demand for debt assets.

At 1630 AEDT, the yield on the Commonwealth Government March 2019 bond was at 4.1 per cent, down from Friday's close of 4.115 per cent, while the yield on the April 2012 bond was at 3.288 per cent, down from 3.428 per cent.

On the Sydney Futures Exchange, the March 10-year bond futures contract price was 95.895, up from Friday's close of 95.875, while the March three-year bond futures contract price was 96.715, up from 96.585.

The local bond market was better bid on Monday as investors took their cues from the Friday night release of US non-farm payrolls data for December, which showed a 7.2 per cent unemployment rate, the highest level since January 1993.

"The unemployment rate broke through seven per cent - nine per cent is looking increasingly likely," Commonwealth Bank of Australia interest rate strategist Jarrod Kerr said.

Mr Kerr said the upward revisions to October and November's combined job loss figures - adding up to 154,000 - stirred worries among investors about a prolonged US recession.

"It looks like it's going to be a prolonged recession, one that's going to be deeper and longer than previously thought," he said.

The US Labor Department revealed 524,000 jobs were lost in December, a number slightly below market forecasts of 533,000.

Jobs were lost in December for the 12th straight month, with the number of employment positions shed in 2008 the highest annual fall since 1945, the year World War II ended.

Australian three- and 10-year bond futures prices rose in late morning trade, with the three-year contract gaining more, after the ANZ Banking Group's job ad series showed a decline for the eighth straight month.

This added to expectations of another interest rate cut from the Reserve Bank of Australia in February. The RBA cut its rate by one percentage point in December to 4.25 per cent, the lowest since May 2002.

Employment positions advertised in newspapers and on the internet fell by a seasonally-adjusted 9.7 per cent last month, to a weekly average of 190,661, and by an annual rate of 29.9 per cent, the ANZ series showed.

The latest number signalled the eighth straight month of decline, and was even more severe than November's 8.6 per cent fall.

Financial markets are expecting official Australian Bureau of Statistics labour force data for December, due out on Thursday, to show 20,000 job losses and an unemployment rate of 4.5 per cent, up from November's 4.4 per cent.