Aussie Bond futures have operated in...>

AUSSIE BONDS: Aussie Bond futures have operated in a tight range in the early

part of the SFE session, with the cash space playing catch up after Monday's NSW

holiday. Focus is set to fall on the RBA's MonPol decision later today. All of

those surveyed expect the Bank to leave the cash rate unchanged at 1.5%, so

focus will quickly shift to the rhetoric employed in the accompanying statement.

The RBA should maintain its glass half full approach, with the stronger than

exp. Q2 GDP report & a tighter labour market providing some scope for a slightly

more upbeat assessment of the domestic situation, however, external matters (at

a minimum) continue to cloud the RBA's outlook.

- The domestic 3-/10-Year cash yield differential last trades ~3.0bp steeper at

64.5bp, tracking Tsy price action from Monday, while the long end of the AU

curve continues to outperform the Tsy counterparts, with the AU/U.S. 10-Year

yield spread last ~-39.5bp.

- On the corporate issuance front the long awaited new Heathrow A$ 2028 line has

been formally announced, with IPT ASW +140bp region.

- The Bill strip last deals 1-2 ticks softer on the day.