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

AUSSIE BONDS: Aussie bonds head into the close broadly flat, a slightly move

dovish set of RBA minutes helping futures erase most of the losses sustained

during SYCOM trade in futures. 3-Year future last flat on the day at 98.06, up

some 3 ticks during Asia. 10-Year future last down 1 tick at 97.43 up around 2

ticks in Asia.

- In the minutes from their November meeting the RBA were cautious around

inflation and noted the lack of wage passthrough to inflation. Market will look

ahead to a speech from RBA Governor Lowe at 0905GMT/2005AEDT for confirmation of

a dovish bias in the wake of weak data such as the wage figures last week.

- Yields mixed across the curve, long end dropping slightly. 3-/10-Year spread

around 0.4bp wider as 10-Year holds modest losses. AU/US spread last at 18.8bp,

lowest since June ahead of 2029 auction on Wednesday.