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Bond futures stuck to a tight range....>

AUSSIE BONDS
AUSSIE BONDS: Bond futures stuck to a tight range on SYCOM, with the U.S. Labor
Day holiday having a notable effect on activity.
- 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 Bill strip last trades unchanged to a tick lower.
- The RBA MonPol decision & a speech from Gov. Lowe provide the headline risk
events today, with GDP input data also due. 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 and 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.
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com

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