Aussie bonds opened SFE lower after....>

AUSSIE BONDS: Aussie bonds opened SFE lower after declining alongside US tsys

during SYCOM. The move lower followed strong US CPI data ahead of the Fed

meeting next week. Aussie bonds caught a bid on the SFE open after reports that

North Korea had launched another missile over Japan. The reaction was limited

compared to previous missile launched by North Korea, with some in the market

calling North Korea "the boy who cried wolf" with this series of provocations.

- Aussie bond futures are last around 2 ticks lower in both 3's and 10's, though

are off session lows. Yields higher across the curve, some steepening seen with

the 3-/10-Year spread around 1.1bp narrower on the session, though has widened

this week with the 10-Year yield seeing almost 14bp of gains on the week.

- Volume had rolled into the Dec'17 contract in futures already, and the final

settlement for the Sep'17 came at 0300BST/1200AEST. YMU7 settled at 97.20, while

XMU7 settled at 97.2725.

- Volumes are fairly thin today with most of the roll activity seen earlier this

week and no domestic data.