Aussie Bond futures operate around.....>

AUSSIE BONDS: Aussie Bond futures operate around session lows following the

release of the latest AU labour market report, which revealed a lower than

expected unemployment rate (5.0%; Median 5.3%; Aug 5.3%) driven by a fall in the

participation rate (65.4%; Median 65.7%; Aug 65.7%) as the headline addition to

the number of those employed missed expectations (+5.6K; Median +15.0K; Aug

+44.6K).

- 3-Year futures are threatening to break below their 200-DMA, after moving

below the 50% retracement of the April-September rally on the back of the labour

market report.

- The domestic 3-/10-Year cash yield differential last deals ~2.0bp flatter at

~65.0bp, with the AU/U.S. 10-Year yield spread last at ~-47.5bp as the labour

market data allowed AU paper to unwind some of the post-FOMC meeting minutes

outperformance vs. Tsys.

- 3-Month BBSW fixed ~0.3bp higher today, with repo rate operations holding

above 2.00%. Bills followed Bonds lower, with the strip last dealing 1-5 ticks

softer last.