A hawkish BOE, coupled with stronger...>

AUSSIE BONDS: A hawkish BOE, coupled with stronger US data and upbeat Fedspeak

saw US treasuries tag a 2.88% top, before losing ground late into the close as

equites fell sharply. 

- It was another rollercoaster ride for Aussie rates, as focus shifted to RBA

Gov. Lowe's comments early in the European session, where he said does not see a

strong case for near term policy adjustment nor that the RBA should move in

lockstep with foreign central banks.

- May IBs printed a 49.5 high following the comments, with large volumes going

through in bond futures, which closed largely unchanged despite CTA activity

providing good ranges and volumes. 

- The curve kept its steepening bias and 3-/10-Year spread traded up to 72.5,

with AU/US 10-Year ranging 3.5-6bps over the session. 

- RBA Quarterly SOMP today which appears as a non-event as intraday options are

83/85. Swap spreads should also remain offered.