Bond futures have continued to.........>

AUSSIE BONDS: Bond futures have continued to trickle lower, following the

initial fall in the wake of the domestic CPI release. Today's domestic CPI data

will re-affirm the Bank's view that the next move in the cash rate will likely

be higher, and that there is no need for adjustments in the Bank's policy

settings in the near term. The latest round of headline domestic CPI data topped

exp., although remains shy of the lower end of the RBA's target band of

2.0-3.0%. Underlying inflation metrics were inline with the RBA's Q4 assumption

(from the most recent SoMP). This comes at a time when the market remains

focused on the prospect of rate cuts (BBG interpolated OIS WIRP model points to

a ~35% chance of MonPol loosening this year, as a modest degree of rate cut

chances were priced out in lieu of the CPI print).

- YM -4.5 ticks and XM -2.5 ticks. YM/XM runs flatter to 50.0 as a result, with

the cash equivalent at 48.9bp. AU/U.S. 10-Year yield spread trades at -47.0bp.

- Bills last trade 3-5 ticks softer through the reds. IB activity is running at

a healthy rate, contracts from March out trade 1.5 to 2.5 ticks lower on the

day.