After yesterday's Asia-Pac.............>

AUSSIE BONDS: After yesterday's Asia-Pac excitement in Aussie Bonds post retail

sales data, taking the 3-Year benchmark contract to 3-Week highs and the 10-Year

to weekly highs, the contracts are both currently down, the 3-Year last down 2

ticks at 97.860 and the 10-Year last down 2.5 ticks at 97.1650, the Aussie

10-Year bond auction came in strong (part of the underlying basket for XMZ7,)

cover was 4.5571x from 3.7x times previously on the same line and sources

reported 6k YMZ7 was sold as both contracts went on the descent at 97.85, both

contracts came up very mildly despite headlines coming down from the WSJ

reporting the RBA is still not ruling out a rate cut even after retail sales

slump.

- On the overnight, although more resilient than Tsy's Aussie bonds did blip

lower in tandem with Tsy's after lower-than-expected 260K initial weekly jobless

claims & firm 1.2% Aug. factory new orders. 

- Yields up across the curve, holding out from prior to the auction, the 3-Year

up 1.9bp and the 10-Year up 2.3bp.