Aussie Bonds remain in a narrow........>

AUSSIE BONDS: Aussie Bonds remain in a narrow band, in the upper end of the

recent range. The domestic 3-/10-Year yield differential & AU/US 10-Year yield

spread continue to operate around familiar levels. 10-Year Bond futures'

hesitation ahead of YtD highs is a concern for bulls given daily studies

correcting from overbought levels, daily momentum divergence and Bollinger tops

lingering above. Bulls need a close above 97.440 to confirm a break of the

100-WMA (97.3760) and initially target 97.500-520. Bears look for a close below

97.335 to ease bullish pressure.

- 3-Month BBSW fixed 1.8bp lower today, a 5th consecutive lower fixing, as FY

end pressures alleviate. This will please the RBA, after it noted that

"short-term wholesale interest rates have increased over recent months. This is

partly due to developments in the U.S., but there are other factors at work as

well. It remains to be seen the extent to which these factors persist." The

white & red Bill contracts last deal unch. - 2 ticks higher.

- Participants await a speech from the RBA's Heath, at the Urban Development

Institute of Australia.