Aussie bond futures gapped higher at...>

AUSSIE BONDS: Aussie bond futures gapped higher at the SFE open as markets

digested the latest North Korea hydrogen bomb test. 3-Year future las tup 2

ticks at 98.02, jumping from 97.99 on SYCOM; 10-Year futures last up 2.5 ticks

at 97.37, up from 97.33 on SYCOM.

- Yields dropping across the curve, moves fairly even but seeing some mild

flattening, 10-Year sector leading the sell off.

- Markets ignore the Melbourne Institute inflation data, inventories/company

operating profit data and ANZ job advertisements. Inventories dropped 0.4%

against expectations of a 0.3% increase, company operating profit fell 4.5%

against expectations of a 4.0% drop. The negativity from this was offset by a

decent job advertisements print, up 2.0% from 1.6% last time out, this was the

6th straight rise.

- Volumes thin with US participants out for the Labour Day holiday.