Aussie Bond futures continue to........>

AUSSIE BONDS: Aussie Bond futures continue to trade at best levels, after the

space followed Tsys higher. AU paper has lagged Tsys, with the AU/U.S. 10-Year

yield spread trading at ~-41.0bp last, ~2.5bp higher on the day. - 3-Year

futures are closing in on their October highs, with 10-Year bulls looking to the

early September highs, after the contract breached its October peak. The

domestic 3-/10-Year cash yield differential deals at ~54.5bp, after trading

closer to 60bp Monday. Yields across the curve sit 2.6 to 7.8bp lower last.

- Bills trade flatter, with the whites and reds trading 2 ticks lower to 5 ticks

higher last. 3-Month BBSW set over 1.0bp higher today, weighing on front end.

- Focus remains on the RBA MonPol decision due later today. Not much expected in

terms of fireworks as the Bank confronts a backdrop of a tightening labour

market, limited inflation & wage growth, moderating house prices in some of the

major AU cities and the global trade war backdrop. All of those surveyed expect

the Bank to leave the cash rate unchanged at 1.50% at its final decision of

2018. Markets currently pricing a ~70% chance of the Bank remaining on hold

through Sep 2019 according to BBG WIRP function.