A measured reaction for the space as...>

AUSSIE BONDS: A measured reaction for the space as the RBA delivers the widely

anticipated 25bp cut to the cash rate. The accompanying statement maintains a

relatively upbeat assessment of the current economic backdrop, with no signs of

deep worry evident. The RBA noted that "this easing of monetary policy will

support employment growth & provide greater confidence that inflation will be

consistent with the medium-term target." Looking ahead the RBA noted that "the

Board will continue to monitor developments in the labour market closely &

adjust monetary policy if needed to support sustainable growth in the economy &

the achievement of the inflation target over time."

- Language pointing to "growth around trend" may have been introduced to pave

the way for downgrades in the Bank's growth projections in next month's SoMP.

- YM & XM trade +1.5 ticks apiece after whipping around in a narrow range

post-cut, with YM/XM at 42.0 ticks and the cash equivalent at 37.1bp. Bills

trading unchanged to +2ticks to -1 tick through the reds.

- Focus now moves onto the degree that the big banks pass the rate cuts onto

borrowers & RBA Governor Lowe's address scheduled for later today.