Aussie Bonds were dragged higher in....>

AUSSIE BONDS: Aussie Bonds were dragged higher in the wake of the contractionary

Chinese Caixin manufacturing PMI reading, although 3- & 10-Year futures failed

to consolidate above the early session highs that came about on follow through

from Monday's U.S. Tsy trade. YMH9 last 2.5 ticks higher at 98.225. 10-Year

futures trade 3.0 ticks higher at 97.710. YM/XM last 1.0 flatter at 51.50.

- 10-Year Bond yields have hit the lowest level since November 2016.

- No reaction to the latest soft CoreLogic house price release.

- Worth noting that South Australia Gov't Financing Agency stated that it has no

intention of "accessing term markets during Jan."

- Bills trade 1-4 ticks higher through the whites and reds. RBA reverse repo

rates easing with A$658mn worth of 23-Day ops dealt at 2.004% & A$1.623 worth of

89-Day ops dealt at 2.082%, rates scaling back as year-end effect falls out.