Aussie bonds have recovered from.......>

AUSSIE BONDS: Aussie bonds have recovered from lows hit earlier in the session,

futures saw a brief blip higher at the SFE open on some dip buying after

significant drops on SYCOM in the wake of the FOMC announcement. The FOMC

adopted a more hawkish tone, signalling B/S run off in October and putting a Dec

hike on the table. 3-Year futures last down 3 ticks as opposed to 6 earlier, now

at 97.750, 10-Year future also down 3 ticks at 97.110. 

- RBA Governor Lowe took a more upbeat tone at his speech, noting that while Fed

rate hikes did not meant the RBA would follow suit immediately, it would see

global rates rise over time due to flow through. 

- Yields higher across the curve, though are off highs at the start of the

session following the upbeat remarks from RBA's Lowe. 3-Year yield up 1.5bp

after earlier rising 5bp to hit highest level since December 2014. Some slight

flattening, echoing the move in US tsys. 3-/10-Year spread narrowing to 62.5bp. 

-Sources noting decent two sided flows seen in the IB strip today, Feb (G8) most

recently traded at 40.5 on 1.2k. as markets expect the FOMC will feed into RBA

policy. Follows ANZ comments that they expect 50bp of hikes in 2018.