*** Aussie bond futures push higher....>

AUSSIE BONDS: *** Aussie bond futures push higher after the domestic labour

market report revealed a higher participation rate, which outweighed the higher

than expected headline job growth, pushing the unemployment rate higher. This

pattern was also observed last month and has seen the unemployment rate move

from 4.9% to 5.2% over that horizon.

- This certainly makes the RBA's June meeting more active, although the

underlying dynamics of the labour market report aren't weak, recent moves in

business indicators, vacancies and job adverts do not paint a pretty picture re:

the medium term. The release will increase scrutiny of the minutes of the RBA's

most recent MonPol decision and the upcoming address from RBA Governor Lowe,

both scheduled for next week.

- YM last trades 7.0 ticks higher, with YM 5.0 ticks higher. The contracts

registered fresh all time highs in the wake of the release. YM/XM last deals at

49.0 ticks, with the cash equivalent at 45.8bp.

- Bills trade 5-6 ticks higher through the reds, with markets now pricing a

circa 50/50 chance of a cut next month (this is fluid and will move).