Aussie bonds head into the close.......>

AUSSIE BONDS: Aussie bonds head into the close lower after drifting lower

throughout the session on Monday, despite muted gains in Aussie equity indices.

Futures began their grind lower at the open, taking the lead from US tsys which

came off as North Korea geopolitical fears dissipate somewhat. This move lower

was accelerated with the release of Building Approvals and Construction Work

Done figures. Both data points were stronger than expected, approvals dipped

1.7% in July but this was much smaller than the expected 5.0% drop after an

11.7% jump in June. Construction Work Done rose 9.3% against 1.0% estimated.

However ANZ note that despite a strong headline number the breakdown was weak in

Q2. "Aside from the strength in engineering construction due to an LNG platform

import that will not flow through to Q2 GDP, housing construction declined

further, and private non-residential building was also disappointing."

- The AOFM sold A$900mln 2.255 2028 bonds, demand weakened from the previous

auction despite the circa 6bp yield concession and the bond underlying 10-Year

futures. Yields rose from the open with the curve steepening, yields up 4-5bp

across the curve.