Aussie 10 year bond futures are........>

AUSSIE BONDS: Aussie 10 year bond futures are trading flat, giving up earlier

gains after failing to break above the 97.62 level despite several tests. The

near term correlation with the US remains elevate ahead of the US FOMC tomorrow.

10year cash yields are down 3.3bps at 2.386%, recovering from their lows but

showing no sign of a bullish reversal.

 - The AU-US 10year spread remains stuck in the middle of its range trading at

-42.5bps, while the 3s-10s spread sits at 46.7bps, reversing the gains seen

earlier in the week. The short end of the curve has inverted as rate markets are

now pricing in a greater chance of a cut than a hike in 2019, despite the

probability of cut remaining very low for now. . 

- Attention now turns to the US FOMC ahead of Thursday's Aussie unemployment

data.