Aussie bond futures followed U.S.......>

AUSSIE BONDS: Aussie bond futures followed U.S. Tsys higher on SYCOM and operate

just off of best levels at writing.

- Domestic 3-/10-Year cash yield differential deals at 55bp, after trading

closer to 60bp Monday. Yields across the curve sit 1.7 to 6.3bp lower in early

trade.

- The Bill strip is running flatter, much like the Eurodollar strip Monday, with

the whites & reds trading 2 ticks lower to 3 ticks higher last.

- RBA MonPol decision provides the focal point of the docket 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 ~65% chance of the Bank remaining on hold

through Sep 2019 according to BBG WIRP function.

- AU current account data also due today ahead of tomorrow's GDP print.