Aussie Bills Weekly Update - May 24,...>

AUSSIE BONDS: Aussie Bills Weekly Update - May 24, 2019

- Another week, another bid for the Bill strip with flattening apparent. IR

contracts are 1-4 ticks higher through the reds on the week.

- Monetary policy matters were front and centre, as RBA Governor Lowe noted that

recent labour market developments coupled with the assessment that the Bank

provided at its May MonPol decision, and in the SoMP that followed, has resulted

in the need for the Bank to "consider the case for lower interest rates" at its

June meeting. This has left OIS pricing a near 90% chance of a rate cut in June,

with the latest BBG survey revealing unanimous expectations for a rate cut at

the meeting.

- Westpac's Bill Evans has adjusted his RBA call as a result, from 25bp cuts at

the August and November meeting, and now looks for three 25bp cuts by year end,

one at each of the June, August and November meetings.

- BBSW fixings have registered fresh all time lows, with repo rates also easing.

- Global matters will likely drive the space next week, with building approvals

and private sector credit providing the highlights of the domestic docket.