Aussie Bonds have largely tracked......>

AUSSIE BONDS: Aussie Bonds have largely tracked U.S. Tsys in early dealing this

week, trading back from best levels, as the space showed little reaction to the

ruling coalition's humbling defeat in the latest round of by-elections over the

weekend.

- The domestic 3-/10-Year yield differential has flattened a touch, to trade at

56.5bp, while the AU/U.S. 10-Year yield spread trades at ~-31.5bp.

- 3-Month BBSW fixed 0.3bp lower at 1.962% today, with the Bill strip last

trading 1-2 ticks worse off on the day.

- AU retail sales, due Friday, provides the headline Aussie risk event this

week, with participants also set to keep an eye on the trade balance release due

Thursday. This all comes ahead of next week's RBA MonPol decision. Elsewhere the

MonPol decisions at the BOJ, FOMC & BoE will keep traders interested, as well as

Friday's U.S. labour market report.