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

AUSSIE BONDS: Aussie bonds head into the close lower, after coming under

pressure on the open following several positive data points Aussie bonds

accelerated their move lower after the RBA kept rates on hold at 1.50%. Sources

note that futures also coming under some pressure from the roll, last trading

day is December 15. 3-Year futures last down 6.5 ticks at 97.97, 10-Year futures

last down 5.5 ticks at 97.385.

- Australian Retail Sales rose 0.5%, above the 0.3% estimate and Consumer

Confidence and Services PMI also rose. The RBA kept rates steady, but made some

slightly less dovish adjustments to the policy statement with one comment about

a tightening labour market of particular interest to the market. A slightly

delayed reaction to the RBA saw futures make new session lows.

- Yields up across the curve, moves fairly even, 3-/10-Year spread 0.5bp tighter

on the session at 59bp. 10-Year yield up 5.5bp at 2.599%.

- Extra pressure on futures from the roll, the market is skewed towards longs

after contract highs hit last week and a narrowing of the AU/US spread recently.

Notably OI in the 10-Year is at a record high of 1.086mln.