Aussie Bonds have held lower,..........>

AUSSIE BONDS: Aussie Bonds have held lower, although 3-Year bond futures are off

of lows, last trading at 97.865 (-3.0 ticks), while 10-Year futures are last

trading at 97.2125 (+0.25 ticks). The yield on the cash equivalents last trade

at 2.101% (+2.4bp) & 2.799% (-0.5bp).

- The domestic 3-/10-Year curve is a little flatter as the 3-Year underperforms,

while this morning's well received auction may be supporting the longer end of

the curve. The yield differential last sitting at 69.1p (-1.4bp).

- The AU/US 10-Year yield spread is virtually unchanged at -7.2bp last.

- The short end has continued to face selling pressure following the higher BBSW

fix, with the white & red bill contracts 3-4 ticks lower and heft sell side flow

noted in IRM8 through the session, while the outright bond rolls have been

active with selling pressure also noted there.