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

AUSSIE BONDS: Aussie bonds head into the close lower, selling off after strong

Labour Market data. Headline was a strong gain of 61.6k jobs (est. 19k), the

previous month's gain was revised higher by 4.1k. The breakdown was also strong,

gains across both Full Time and Part Time jobs with the majority from full time.

The employment rate held at 5.4% but the participation rate rose from 65.2% to

65.5%. 

- 3-Year future down 8.5 ticks to 97.905, 10-Year future falls 3.5 ticks to

97.42. Yields had opened the session lower but accelerated the move after jobs

data. Curve flattens, 3-/10-Year spread narrows 4.8bps to 48.3bp, tightest in 12

months.

- OIS markets priced in increased chances of an RBA rate hike in Q3/Q4, odds of

a hike in November 2018 now 88% from 61% before data.

- As a note volume has now rolled into the March (H8) contracts in both 3 and 10

Year futures, tomorrow is the last trading day for the December (Z7).