After yesterday's excitement for.......>

AUSSIE BONDS: After yesterday's excitement for Aussie Bonds in SFE post retail

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

to weekly highs both contracts have remained relatively steady on this session

ahead of Payrolls tomorrow scheduled for 1330BST/0830ET. The 3-Year was 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. 

- MNI spoke to the RBA's Harper, Harper broadly said the RBA thinks interest

rates are more likely to go up than down but a loss in momentum in household

consumption mat be one of the reasons a cut could happen.

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

up 2.6bp and the 10-Year up 3.2bp.