Aussie Bonds are lower but off of......>

AUSSIE BONDS: Aussie Bonds are lower but off of worst levels.

- Early dealing saw the space follow US Tsys lower, with risk appetite being

aided by an ABC sources piece which suggested that US Treasury Secretary Mnuchin

has urged Trump to exempt Canada from the steel & aluminium tariffs.

- Bonds then moved to fresh lows after Australian Q1 GDP topped expectations,

although the household consumption metric was softer than some had forecast.

- The cash 3-/10-Year yield differential is trading around 56.0bp and the AU/US

10-Year spread is around -19.0bp after coming in to -17.8bp on the back of the

GDP print.

- The white and red bill contracts last trade 1-3 ticks lower, with the front

end pressured after 3-Month BBSW fixed 1.59bp higher at 2.0385%, and as repo

rates tread higher.

- The IB strip is relatively unmoved, still pricing a 25bp hike in for October

2019.