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Aussie Bonds have clung to SYCOM.......>

AUSSIE BONDS: Aussie Bonds have clung to SYCOM closing levels, after tracking
Tsys higher on Thursday as worries over geopolitical and trade matters spilled
into Bonds & EMFX, following the initial RBNZ inspired bid.
- The domestic 3-/10-Year yield differential is a touch flatter at 57.7bp, while
the AU/U.S. 10-Year yield differential continues to operate just below -30bp.
- The Bill strip is 1 tick lower to 2 ticks higher last.
- Focus today falls on the RBA's quarterly SoMP. RBA Governor Lowe used an
address on Wednesday to reiterate that he exp. the next move in the cash rate
will be higher, and that he sees no strong case for a near term adjustment. The
most interesting point probably came on inflation, as he noted that he expects
CPI to be close to 2.5% by 2020, the most recent SOMP, which ran through to June
2020, had CPI. exp. at 2.25% at the end of the forecast range. Elsewhere Lowe
pointed to elevated vacancies equating to a tighter labour market, suggesting
room for a lower unemployment rate projection this time out, the last SoMP had a
medium term projection of 5.25% for the unemployment rate.
MNI London Bureau | +44 0203-865-3809 |
MNI London Bureau | +44 0203-865-3809 |

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