Bond futures continue to operate in....>

AUSSIE BONDS: Bond futures continue to operate in a narrow range, with 3-Year

yields holding below 2.0%. The domestic 3-/10-Year yield differential continues

to trade either side of 54bp, with the AU/U.S. 10-Year yield spread last dealing

at ~-35.5bp. The space had little to no reaction to the release of the latest Q2

GDP partials with net exports contribution to GDP in line with the median

estimate, while the current A/c deficit was wider than exp, with a -ve revision.

- The Bill strip last trades a tick higher to a tick lower.

- The RBA MonPol decision & a speech from Gov. Lowe provide the headline risk

events today. The RBA will almost certainly leave its cash rate on hold at

1.50%. The Bank is unlikely to be swayed by domestic political uncertainty & the

risk of wider mortgage rate rises, instead focusing on econ. data, including a

dip in the unemp. rate, in effect maintaining its glass half full approach.

Chances are that the Bank will reiterate that the next move in the cash rate

will likely be up in both the minutes from the meeting & Lowe's speech. Last

month's SoMP gave the RBA the chance to update its econ. forecasts, with no

large deviations from the prior outlook apparent.