Aussie Bonds tracked Tsys & had........>

AUSSIE BONDS: Aussie Bonds tracked Tsys & had ebbed away from early session lows

ahead of today's RBA decision. The RBA stood pat, as exp., with a statement that

offered little in the way of surprises. It introduced the risk factors apparent

in Europe, particularly Italy, as well as those from a "few emerging market

economies." The RBA reiterated its reference to the issues created by the US

trade stance. Elsewhere the Bank removed its reference to the reduction of spare

capacity & stated that while there may be some further tightening of lending

standards mortgage interest rates have continued to decline, perhaps suggesting

that there is no need to act to alleviate any pressure that borrowers may be

feeling. The IB strip isn't fully pricing in a 25bp hike until Oct '19, while

the OIS strip is only pricing around 5bp worth of tightening over the next year.

Elsewhere Q1 Current A/c & Net Exports data came in on the soft side, perhaps

tempering exp. for tomorrow's GDP release after yesterday's strong partials.

- The space continues to operate around familiar levels with the AU/US 10-Year

spread at ~-20.0bp and the domestic 3-/10-Year yield differential at ~57bp after

Bonds has a limited knee-jerk higher on the RBA statement.