Bond futures operate shy of............>

AUSSIE BONDS: Bond futures operate shy of settlement levels after following the

path of Tsys on SYCOM. Late Monday there was some attention on an AFR article

which noted "industry participants believe the RBA & banking regulator are

considering a targeted alternative to a cut to the official cash rate, which

would involve lowering the minimum 7.25% interest rate banks use when assessing

a home loan borrower's repayment capacity by 50bp to 6.75%." This was followed

up by the latest MNI insight piece, according to our understanding, "the RBA

will consider lowering interest rates when it meets May 7, but a cut in the cash

rate is less likely than financial markets have priced in following

lower-than-expected inflation." Elsewhere, RBA Governor Lowe spoke under Chatham

House agreement. YM last deals 1.0 tick below settlement, with XM -2.0 ticks.

YM/XM trades at 53.5 ticks, with the cash equivalent at 48.9bp.

- Bills trade unchanged to 1 tick lower through the reds.

- It is a big 24 hours for regional data, with Australian credit data, the NZ

labour market report, NZ ANZ business confidence survey, China official PMIs,

China Caixin m'fing PMI all due.