Aussie Bonds were more reluctant to....>

AUSSIE BONDS: Aussie Bonds were more reluctant to turn offered than their U.S.

counterparts, after being underpinned by risk off flows and big misses vs. exp.

in the latest round of AU building approvals data in early trade.

- The 3-/10-Year cash yield differential last deals ~1.0bp steeper at ~65.0bp,

with the AU/U.S. 10-Year yield spread last ~-43.5bp on the back of the

aforementioned outperformance vs. Tsys.

- The AOFM's auction of A$500mn of the 3.25% 21 Apr 2029 Bond, issue #TB138,

passed smoothly, as the cover ratio moved higher, aided by a low nominal

issuance amount & the fact that the line is a futures basket constituent for

XMZ8, as well as relatively fair RV on the curve.

- YMZ8 & XMZ8 breached their respective Tuesday highs. YMZ8 has closed above its

50-DMA (97.930), based on a continuation chart, as the price action continues to

support the positive tilt building from the 97.800 base.

- Lonsdale Financial has outlined the potential for a 7-Year A$ deal.

- Repo rates have continued to ease post-quarter end.

- The Bill strip last deals unchanged to 4 ticks higher.