Bonds have tracked US Tsys lower,......>

AUSSIE BONDS: Bonds have tracked US Tsys lower, accelerating after a strong

round of domestic data. The space continues to operate in familiar territory,

with 10-Year futures topside failure from last week still providing the most

interesting point of note. The AU/US 10-Year spread trades around -20bp, with

the domestic 3-/10-Year yield differential a little flatter on the session.

- The Bill strip ground lower following shorter dated Bonds after the

aforementioned strong domestic data release. 3-Month BBSW fixed higher on the

day.

- Q1 business inventories & corporate profits came in better than exp., and

therefore may offer some upside risk to Wed's GDP release. Additional GDP inputs

will be released Tues (net exports & public demand).

- Elsewhere the RBA will issue its latest MonPol decision on Tuesday with all of

those surveyed looking for the Bank to leave its cash rate unchanged at 1.5%. As

a result participants will scour the statement for any changes in rhetoric.

Rates markets are pricing in a mere 45% chance of a 25bp hike over the next 12

months, which is underpinning the shorter end of the yield curve.