AU Bonds have been a little stickier...>

AUSSIE BONDS: AU Bonds have been a little stickier than Tsys, and have struggled

to turn bid, with participants focusing on the pricing of the new 2050 I/L Bond,

due from the AOFM later today, as opposed to the latest round of U.S. tariffs on

China. As a reminder yesterday the AOFM issued initial price guidance for the

issue at a spread of 9 to 13 basis points over the mid-yield of the 21 August

2040 Treasury Indexed Bond. The AU/U.S. 10-Year spread is back in to -35bp on

the AU underperformance on the latest bout of risk off flows.

- The Bill strip last trades 1-2 ticks softer, 3-Month BBSW fixing -0.2bp today.

- AU house price data and the minutes from the RBA's most recent MonPol decision

headline the domestic docket today. As a reminder the lack of dovish rhetoric

accompanying the RBA's September MonPol decision was the key takeaway as the

Bank left its cash rate unch. at 1.5%. Some of the language was more hawkish at

the margin as the Bank noted that "in H118, the economy is estimated to have

grown at an above-trend rate," which was vindicated by the Q2 GDP data. The

Bank's language surrounding mortgage rates was constant, in lieu of the recent

out of cycle hike from Westpac (which was followed post-meeting by ANZ & CBA).