As credit spreads are tight issuance...>

AUSSIE BONDS: As credit spreads are tight issuance is below the AOFM's target

for this time of the year, issuance just surpassed A$10bln this year thus far

when the requirement sits at around A$12bln. Bid-cover ratios on auctions have

picked up since Wednesday's weak 2.96x, Friday's 5.62x, well above the 10 tender

average of 4.16x showing pick up of interest from buyers. 

- Australia's employment data out yesterday showed unemployment rate lower than

previous but full time jobs fell suggesting that more people are going into part

time work, this is in line with the fact that wages were reported to be falling

as well as consumer confidence and linkers breakeven curves were at their

flattest level this year, which may temper BEI curve steepeners. 

- Australian equity markets seem to be little affected by political unrest and

terrorism reacting a lot less than the Nikkei and the Hang Seng on -39pts as

opposed to around 200pts on both the Hang Seng and the Nikkei. A trader at

Mirabaud suggested this lack of reaction may be due to Australia's weighting on

mining and natural resource stocks, illustrated by iron ore is trading at its

highest round about levels since June.