A subdued session for futures, with....>

AUSSIE BONDS: A subdued session for futures, with a stronger than exp. domestic

retail sales print noted. YM & XM trade around unch. levels, with YM/XM last

51.50 as the cash 3-/10-Year yield differential deals at 48.0bp. AU/U.S. 10-Year

yield spread last -41.6bp. Dovish comments from Fed Vice-Chair Clarida & threats

from U.S. President Trump re: the use of emergency powers to fund a border wall

underpin, outweighing optimism surrounding a top tier U.S.-China trade summit. 

- Lack of any fresh long end issuance in the AOFM's latest weekly issuance

schedule noted after the MYEFO saw the AOFM note that "at the time of the

2018-19 Budget, the AOFM planned to establish new bond lines maturing in

September 2023 and December 2030. These lines are no longer planned to be

issued. A syndication of an existing ultra-long bond line may still be

considered."

- Bills last trade unchanged to 1 tick lower in the whites and reds. RBA Reverse

repo ops saw A$780mn worth of 12-Day ops dealt at 2.029% & A$1.355bn worth of

34-Day ops dealt at 2.009%, rates consolidating above 2.0%.

- Inflation expectations & consumer confidence headline next week's AU docket.