Broad buying across the Aussie.........>

AUSSIE BONDS: Broad buying across the Aussie Interbank strip sees the implied

odds of a hike from the RBA decline, OIS now price in the odds of a hike in Q3

2018 at <30%.

- The shift has catalysed a wave of buying in Aussie bond futures, pushing

3-Year future to the highest level in YMZ7 since 28 June at 98.11.

- Yields lower across the curve, 2-Year yield down 2.6bp at 1.733%. Decline in

Aussie 2-Year yield remains below US equivalent, spread last -0.5bp, inverting

for the first time in 17 years

- Notably this inversion does not continue further out on the curve, diverging

economic fundamentals could mean that this perceived mis-pricing is reversed in

the coming weeks, particularly if the Senate passes the tax bill.