Bonds operate just shy of the SYCOM....>

AUSSIE BONDS: Bonds operate just shy of the SYCOM closing levels, and felt

little in terms of spill over from the BOJ's offer to buy an unlimited amount of

10-Year JGBs at a fixed rate.

- The space did draw a degree of support from the largely negative start for

regional equites, although that has now faded and Bonds operate at worst

levels..

- The domestic 3-/10-Year yield differential has steepened by a little over

2.5bp. to trade just shy of 55bp, while the AU/U.S. 10-Year yield spread

operates around -22bp, in familiar territory.

- 3-Month BBSW fixed some 0.6bp lower at 1.9850% today, with OMO rates also

easing. This has supported the front end of the bill strip, with IRU8 being the

only contract to trade higher at present, adding 1 ticks, while the remainder of

the white and red contracts trade 1 to 3 ticks lower.

- Participants look to Wednesday's AU CPI release, although the print isn't

expected to alter the bigger picture of limited inflation/wage growth.