Aussie bonds have extended gains.......>

AUSSIE BONDS: Aussie bonds have extended gains made from SYCOM into SFE, both

benchmark contracts are hovering at their highest levels seen for a month and a

half. The 3-Year futures contract was last at 97.990 and the 10-Year was last at

97.300. 

- The gains on the overnight for both contracts were in line with Tsy's as

Bloomberg reported the planned tax cuts could be phased in over 5 years.

- Mildy higher ANZ consumer confidence helped boost both contracts on SFE as

well as a large clip of Dec futures in Tsys, but further the session has seen

weaker Aus home sales and credit figures. ANZ on Credit Figures: "Australian

private sector credit slowed, but not for reasons the RBA would have preferred.

Business credit growth slowed, whereas housing credit growth was broadly steady.

At 6.6% y/y, housing credit growth is still growing well above income, something

we doubt the RBA will be happy with from the perspective of its third policy

mandate of "the economic prosperity and welfare of the people of Australia"."

- Yields are down across the curve with steepening, the 3-/10-Year spread last

at 3.1bp.