Aussie bonds have been on the..........>

AUSSIE BONDS: Aussie bonds have been on the descent since the start of SFE, both

the 3-Year and the 10-Year last down 3 ticks (3-Year at 97.840 and the 10-Year

at 97.140) after a very flat SYCOM session due to U.S. National holiday,

Columbus Day. The sell off on SFE comes as we hear large blocks of TYZ7 and YMZ7

are being given.

- An extremely lack-lustre auction didn't help the two contracts either,

although not part of the benchmarks underlying baskets positive comments from

RBA speakers and big banks on inflation may be be discouraging investors, the

auction for A$150mln Index Linked bonds came in 2.6x covered from 3.57x

previously covered and with an average yield of 1.2167%, up from 1.1158%. On

Wednesday Australian Q3 CPI data is going to be released and ANZ forecast that

CPI will rise by 0.8% q/q, they said "a result in line with our forecast would

see annual inflation rise to 2.0% y/y," also, last month the RBA's Luci Ellis

said the Australian economy has reached 'a turning point.' 

- The RBA's Debelle is to speak at 0420BST/1420AEST.

- Yields are up across the curve within a very tight range, spreads are tight.