Bonds have moved back from session.....>

AUSSIE BONDS: Bonds have moved back from session highs with 3-Year Bond futures

last trading unchanged at 97.780, while 10-Year Bond futures trade 3.0 ticks

softer at 97.200.

- The space moved to session highs after Fitch affirmed Australia at 'AAA';

outlook stable & the Wash. Post reported that US Special Counsel Mueller raised

the possibility of a presidential subpoena in a tense meeting with Trump's legal

team. An auction of the longest AOFM bond on offer passed smoothly.

- Late on Tuesday RBA Gov. Lowe noted that "our central scenario is for a

gradual pick-up in wages growth & inflation & a gradual reduction in

unemployment. The Board's view is that while this progress is occurring, the

best contribution we can make to the welfare of the Australian people is to hold

the cash rate steady. If things turn out as exp., it is reasonable to exp. that

the next move in interest rates will be up."

- The domestic 3-/10-Year yield differential is 2.5bp steeper at 59.5bp, while

the AU/US 10-Year spread has narrow by 1.3bp to -19.0bp. The white & red Bill

contracts are 1 tick higher to 1 tick lower.