A narrow SYCOM session for both YM &...>

AUSSIE BONDS: A narrow SYCOM session for both YM & XM, with both operating away

from SYCOM highs, 0.5 tick lower than yesterday's settlement levels at writing.

- Highlight of Monday's session came in the form of comments from RBA Governor

Lowe who pointed to the limited capabilities of monetary easing on a global

level, while reiterating the need for fiscal stimulus. This initially pressured

the space on Monday, although the move was faded as the comments were

contextualised. The space also drew support from Westpac altering their RBA cut

call "from August to July. We are surprised that we have to do this, given that

a pause between cuts might have allowed for a smoother transmission process but

cannot deny the explicit signals provided in the Governor's more recent speech.

This includes: that it would "... be unrealistic to expect that lowering

interest rates by 0.25% of a percentage point will materially shift the path we

look to be on"; that "the possibility of lower rates remains on the table"; and

that it "is not unrealistic to expect a further reduction in the cash rate."

- Nothing to inspire on the domestic docket today, but participants look for the

pricing of TCorp's latest round of issuance.