Aussie Bonds have moved higher, with...>

AUSSIE BONDS: Aussie Bonds have moved higher, with 3- & 10-Year Bonds breaching

Monday's highs after a modest miss on the headline AU CPI metrics, although the

underlying CPI measures were largely in line with analyst estimates. This is

unlikely to alter the RBA's steady hand approach. As a reminder the RBA's view

is that "inflation is low & is likely to remain so for some time," however, its

central forecast is "for CPI inflation to be a bit above 2.0% in 2018."

- The bill strip last trades unchanged to 3 ticks higher, with the contracts

operating at session highs.

- Looking at the IB strip, the May '19 contract is pricing in 4.5bp worth of

tightening (based on mids), or an 18% chance of a 25bp hike by the end of May

2019.