Aussie Bonds edged lower alongside.....>

AUSSIE BONDS: Aussie Bonds edged lower alongside Tsys as it became apparent that

US President Trump is set to meet with North Korean leader Kim in the coming

weeks. We also learnt that Kim has promised to halt nuclear tests.

- 3-Year futures last trade at 97.875 (-2.0 ticks), while 10-Year futures last

trade at 97.2125 (+0.25 ticks).

- The domestic 3-/10-Year yield differential last trades at 69.50bp (-1.0bp),

while the AU/US 10-Year yield differential trades at -7.5bp (-0.5bp). - BBSW

fixed higher again today which has continued to add pressure to the front end of

the bill strip, while the dip in bonds has also pressured the short end as we

trade 2-3 ticks lower across the white & red contracts.

- A solid auction of the 3.25% 21 April 2029 bond saw the cover ratio edge

higher (the line moves towards becoming a 10-Year basket constituent) , while

more bidders were successful this time out as the size of the auction ticked up

from the most recent offering.

- The 3-Year roll has been active this morning, with selling pressure noted by

sources.