Aussie bond futures have edged.........>

AUSSIE BONDS: Aussie bond futures have edged higher today with the 10year

briefly breaking above its Dec 10 highs as the relief rally in global stocks

unwound. The lack of constructive comments from President Xi's speech regarding

trade and a number of digs at the US administration ('no golden principles or

arrogant teachers for reform') disappointed risk assets which had gone into the

speech on a solid footing. 

- 10year cash yields trade down 2.8bps at 2.416%, pressured by the ongoing drop

in breakevens. The curve seen some bullish steepening with the 3s-10s spread at

48.0bps, recovering from recent lows but remaining in its broad downtrend. 

- The AU-US 10year spread sits at -43.3bps, remaining in its tight trading

range. 

-RBA minutes released today showed that that board agreed that the next move is

likely to be an increase, but this seems a long way off. 

- Rate markets are currently pricing in a long pause, with a similarly small

change of a hike or a cut over the course of 2019. Attention will turn to

tomorrow's US FOMC ahead of Thursday's Aussie unemployment data.