Aussie Bond futures trade just back....>

AUSSIE BONDS: Aussie Bond futures trade just back from best levels. Participants

likely seeing the RBA's nod towards positive wage developments, even though the

Bank noted that any developments on the matter are likely to be gradual in

nature. Talk re: tighter credit matters noted. "Ongoing trade tensions" also

mentioned. All in all there was little in the way of notable developments in the

statement, with tomorrow's AU GDP release providing the interest in terms of

economic releases this week.

- AU paper has lagged Tsys during the session, despite tracking the move higher

early on, with the AU/U.S. 10-Year yield spread trading at ~-40.5bp last, ~3.0bp

higher on the day.

- 3-Year futures are closing in on their October highs, with 10-Year bulls

looking to the early September highs, after the contract breached its October

peak. The domestic 3-/10-Year cash yield differential deals at ~54.5bp, after

trading closer to 60bp Monday.

- Bills trade flatter, with the whites and reds trading 2 ticks lower to 4 ticks

higher last. 3-Month BBSW set over 1.0bp higher today, weighing on front end.