Aussie bond futures moved to fresh.....>

AUSSIE BONDS: Aussie bond futures moved to fresh highs after Westpac lowered its

call re: the RBA's terminal cash rate to 0.50% (prev 0.75%) and frontloaded its

call for the next rate cut to Oct. (prev. Nov). This followed an uptick observed

on the back of worrying signals re: the labour mkt within the latest CBA PMI

survey, coupled with an APRA announcement which noted that it required

Macquarie, Rabobank & HSBC to tighten the intra-group funding arrangements for

their Australian operations.

- YM last +4.0 ticks, XM +2.5 ticks, resulting in some bull steepening of the

curve; YM/XM at 44.0 ticks, with the cash equivalent at 39.4bp.

- Bills trade 4-5 ticks higher through the reds, with heavy buying noted in the

front end of the strip (particularly IRU9) on the aforementioned factors, in

addition to a slide in the 3-Month BBSW fixing. RBA repo ops saw A$650mn worth

of 20-day ops allotted at an average of 1.330%, while A$1.072bn worth of 50-day

ops were allotted at an average of 1.286%.

- Focus tomorrow will turn to a speech from RBA Governor Lowe titled "Inflation

Targeting and Economic Welfare."