Bond futures continue to operate.......>

AUSSIE BONDS: Bond futures continue to operate around best levels (still a touch

lower on the day), even with U.S. equity index futures moving to near unchanged

levels at writing. Cash bonds have partially unwound some of their early losses,

but yields remain higher across the curve.

- YM/XM sits 1.0 tick flatter at 53.00, while the cash 3-/10-Year yield

differential trades ~1.6bp flatter at 44.9bp. The AU/U.S. 10-Year yield spread

is last dealing at -42.4bp after the Australian market holiday.

- Bills trade 1 to 3 ticks lower across the white & red contracts, back from the

early lows. Today's RBA reverse repo ops saw A$1.66bn worth of 27-Day ops dealt

at 2.398%. 3-Month BBSW set at 2.0871%, the highest fixing since July.

- The Aussie docket is empty this week, so the space will likely be driven by

broader risk appetite.