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

AUSSIE BONDS: Aussie bonds have extended gains made from SYCOM into month end on

SFE, both benchmark contracts are hovering at their highest levels seen for a

month and a half. The 3-Year futures contract closed SFE at 98 and the 10-Year

closed SFE at 97.305. 

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

well as a large clip in Tsys traded around 0000am BST, sources reported "4k TYZ7

bought at 125-02 to 03+," then around 0100BST sourced quoted a large clip traded

in the 3-Year Aussie future, "10k YMZ7 lifted at 97.99."

- The session saw weaker Aus home sales and credit figures which Aussie Bonds

shrugged off. 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, the 3-/10-Year spread last at 2.6bp.