Aussie bond futures remained pinned....>

AUSSIE BONDS: Aussie bond futures remained pinned to best levels as we approach

the close, after NAB hiked its variable mortgage rates by 12-16bp, joining its

big 4 counterparts who moved in late '18 (NAB only chose to move rates for new

customers at that time), citing an increase in funding costs, with the leg

higher in futures coming on the back of the RBA's perceived reaction function

owing to the wealth effect. A fairly solid domestic labour market print applied

some pressure to the space earlier in the session.

- YM last +2.0 tick, XM +0.5 tick, while YM/XM trades at 52.0, after the push

higher allowed some bull steepening to creep in. The cash 3-/10-Year yield

differential trades at 50.6bp, with the AU/U.S. 10-Year yield spread last

-47.2bp.

- Bills unchanged to 3 ticks higher across the whites and reds, with the strip

flatter at writing. RBA repo ops saw A$755mn worth of 20-Day ops dealt at

2.037%, while A$920mn worth of 55-Day ops were dealt at 2.080%. This compares to

the 2.086% & 2.089% seen in yesterday's 37- & 63-Day repo ops.

- Focus now turns to AU Q4 CPI data, due Wednesday, after the holiday weekend.