Bonds stronger on rising oil prices

The Australian bond market has opened firmer, as the ongoing Middle East conflict and rising oil prices sparked concerns about the global economic recovery and prompted buying of US Treasuries.

At 0830 AEDT on the ASX 24, the March 10-year bond futures contract price was 94.440 (implying a yield of 5.560 per cent), up from Friday's close of 94.410 (5.590 per cent).

The March three-year bond futures contract price was 94.870 (5.130 per cent), up from 94.840 (5.160 per cent).

A positive US non-farm payrolls report, which showed the US unemployment rate fell to its lowest level since April 2009 in February at 8.9 per cent, was offset by the turmoil in Libya and the soaring price of oil.

Crude oil prices gained $US2.51 on Friday to settle at $US104.42 a barrel, having touched its highest level since September 2008 during intraday trading.

ANZ Banking Group said the Australian bond market tracked the moves in US Treasuries during the weekend offshore session.

"US Treasuries sold off slightly following the release of the payrolls data," ANZ said in a research note.

"However, losses were erased as the worsening situation Libya and rising oil prices saw Treasuries rally on safe haven demand.

"Australian bond futures also rallied, underperforming US Treasuries at the short and long end of the curve. The curve also flattened slightly."

Meanwhile, Wall Street closed lower last week - the Dow Jones Industrial Average slipped 0.72 per cent, while the S&P500 slipped 0.74 per cent. The NASDAQ ended down 0.5 per cent.

In terms of Monday's local session, the focus for market players was expected to be the release of the ANZ job advertisements survey for February.

The Australian Bureau of Statistics was due to publish the February labour force report on Thursday.

The Australian Industry Group/Housing Industry Association performance of construction index (PCI) for February was also slated for publication on Monday.