Aussie Bonds have outperformed Tsys....>

AUSSIE BONDS: Aussie Bonds have outperformed Tsys on the leg back from the

recent highs in U.S. yields, with the AU/U.S. 10-Year yield spread last trading

at -~37.0bp.

- The latest adjustment to the BOJ's Rinban operations eventually spread to AU

Bonds & Tsys, adding some pressure, although the move has been somewhat limited

outside of JGBs.

- Focus continues to fall on the funding space. 3-Month BBSW fixed 0.5bp higher

today, however, it still remains overshadowed by the recent jump in repo rates

ahead of quarter end.

- The Bill strip trades 1 tick lower to 2 ticks higher last, as the front

contracts underperform.

- Next week's AOFM schedule is relatively duration heavy, as it brings A$800mn

of the 2.75% 21 November 2029 bond & A$1.5bn of the 2.50% 21 May 2030 bond to

market.