Comments from RBA board member.........>

AUSSIE BONDS: Comments from RBA board member Harper (made to the WSJ), who

reiterated that he believes the next move in the cash rate will be up, pointing

to a strong budget and labour market, allowed the space to move back from its

NAB business survey inspired highs, and register fresh lows. Harper's comments

may disappoint those who were looking for a dovish tilt at the RBA's first

MonPol decision of 2019, due next week. Although bond futures trade off of

session lows.

- YM last trades 1.0 tick lower on the day, with XM down 2.5 ticks. Curve a

touch steeper on the day, YM/XM at 53.0 last, with the cash 3-/10-Year yield

differential at 51.9bp. AU/U.S. 10-Year yield spread last at -50.5bp.

- Bills trading unchanged to 1 tick lower on the day through the reds, with some

IB flow noted since the Harper article hit. Space has followed bonds/AU headline

flow. Today's RBA repo ops saw A$290mn of 20-Day ops dealt at 1.977%, with

A$1.740bn worth of 70-day ops dealt at 2.013%.

- AU CPI, due tomorrow, provides the immediate domestic risk event for the

space.