Bond futures initially retraced from...>

AUSSIE BONDS: Bond futures initially retraced from their respective post-RBA

peaks early on SYCOM, before grinding higher in overnight trade, with the most

notable move coming on the back of the weak ISM m'fing print out of the U.S.

- Yesterday's dovish RBA statement, which placed focus on "full" employment and

left the easing bias in the concluding paragraph, has triggered re-pricing of

the IB strip, with markets now pricing a 45% chance of a follow up cut next

month. Will the RBA go on Melbourne Cup day?

- Governor Lowe's evening address offered little new, stressing that MonPol

"still works" and reiterating the call for fiscal easing. He also touched on

matters that will be addressed in Friday's FSR.

- YM +3.0 with XM +2.5, leaving YM/XM at 34.0.

- The cash space has reacted to overnight moves, with 3-Year yields registering

a fresh all-time low this morning.

- Bills trade 1-4 ticks higher through the reds.

- A$1.2bn worth of ACGB 1.50% 21 Jun 2031 supply headlines the docket today.