A small uptick noted in bond futures...>

AUSSIE BONDS: A small uptick noted in bond futures in the wake of the release of

the minutes from the RBA's April meeting, which have been perceived as dovish,

at the margin.

- The minutes reiterated the idea that the Board saw no strong case for a

near-term move in interest rates. However, the Board "discussed the scenario

where inflation did not move any higher and unemployment trended up, noting that

a decrease in the cash rate would likely be appropriate in these circumstances."

The Board conceded that the impact of rate cuts would likely be lower than

previous instances but believes that easing (if required) would support the

economy via a lower AUD & reduced interest payments. The Bank went on to note

that inflation will likely remain muted for some time, meaning that the

likelihood of a near-term cash rate hike is low. Ultimately, the Board continues

to juggle the outlooks for growth and the labour market.

- YM last trades +2.0 ticks, with XM +2.5 ticks. YM/XM trades at 50.5 ticks,

with the cash equivalent at 46.4bp. Bills trade unchanged to 2 ticks higher

through the reds.