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.