Aussie bonds ended the session lower...>

AUSSIE BONDS: Aussie bonds ended the session lower on Tuesday. After initially

weakening alongside US tsys following upbeat comments from US Tsy Sec Mnuchin

about the forthcoming tax bill vote the move lower was accelerated after strong

NAB Business Conditions data. The headline index hit 21 in October, up from 14

in September and printing the highest on record to shake off recent political

jitters in Australia. The rise was driven by a jump in sales metrics, while

strength in the labour market was also a driver of confidence.

- Futures hit session lows just before 0200GMT, the move lower was capped after

weaker than expected Chinese data. Industrial Production and Retail Sales in

China both missed estimates which saw sellers crop up in the Australian equity

indices and put a bid under Aussie bonds futures. 3-Year future ended down 5

ticks at 97.99, 10-Year future finished 3.5 ticks lower at 97.325.

- Yields rose across the curve, some bear flattening seen with the 3-/10-Year

spread 1.8bp tighter. The short end saw bore the brunt of the selling during the

session and the 3-Year yield saw the biggest intraday rise since early Sept.

Volumes were much stronger today