Aussie Bonds relative outperformance...>

AUSSIE BONDS: Aussie Bonds relative outperformance vs. U.S. Tsys continued

overnight, with futures last trading a touch above their early session lows,

while Tsys fell away as the U.S. 10-Year yield crossed above 3.20%, with the

AU/U.S. 10-Year yield spread dealing at ~-51.0bp last.

- The AU 3-/10-Year cash yield differential runs steeper, in sympathy with the

U.S. Tsy curve, and last deals at 68.0bp, +3.5bp on the day.

- The Bill strip trades unch. to 8 ticks lower last, running steeper on the day.

3-Month AUD basis has continued to tighten as repo rates ease after quarter end,

while BBSW fixed unch. today, although the move in yields has outweighed funding

dynamics today.

- Heathrow funding has launched A$ 10-Year paper that is expected to price

today, while Lonsdale finance priced A$ 7-Year paper at +140bp.

- The space had little reaction to AU trade data that was released earlier.