Aussie Bonds have struggled to turn....>

AUSSIE BONDS: Aussie Bonds have struggled to turn bid after tracking U.S. Tsys

lower on SYCOM, with a recent bout of heavy selling orders in YMZ8 pushing the

contract below technical support, adding fresh weight to the complex. The move

has extended on the back of comments from Chinese Premier Li, who has noted that

China will not devalue the Yuan to stimulate exports.

- 3-Month BBSW fixed largely unchanged today, up a mere 0.06bp, while RBA OMO

rates hit the highest level since Mar 29, jumping to 2.178%. Quarter end

pressures seem to be playing out more in the basis & OMO space than in BBSW this

time around. The Bill strip last trades 1-7 ticks lower.

- The recent selling pressure has allowed the space to play catch-up to Tsys,

with the AU/U.S. 10-Year yield spread at ~-34bp last.

- RBA's Kent offered little fresh insight into MonPol in an address that he made

today.