Bonds have largely tracked U.S.........>

AUSSIE BONDS: Bonds have largely tracked U.S. Tsys, sticking to a tight range.

- The space had no reaction to comments from RBA Governor Lowe, as he stuck to

script. Lowe noted that he exp. the next move in the cash rate will be higher,

and that he sees no strong case for a near term adjustment. The most interesting

point probably came on inflation, as he noted that he expects CPI to be close to

2.5% by 2020, the most recent SOMP, which ran through to June 2020, had CPI.

exp. at 2.25% at the end of the forecast range. Elsewhere Lowe pointed to

elevated vacancies equating to a tighter labour market. - The domestic

3-/10-Year yield differential has edged back to ~58bp, while the AU/U.S. 10-Year

spread sits just above -30bp.

- Some focus on semi issuance out of the Northern Territory in the form of 2030

Bonds, while on the corporate side HSBC has launched 3-Year floating &/or fixed

paper. - Repo rates were largely stable today, with 3-Month BBSW fixing ~0.4bp

lower, the bill strip last deals unchanged to 2 ticks lower.

- Focus now turns to Friday's SoMP.