Futures closed just off of lows........>

AUSSIE BONDS: Futures closed just off of lows following the release of the

latest AU labour mkt report, which revealed a lower than expected unemployment

rate (5.0%; Median 5.3%; Aug 5.3%) driven by a fall in the participation rate

(65.4%; Median 65.7%; Aug 65.7%) as the headline addition to the number of those

employed missed expectations (+5.6K; Median +15.0K; Aug +44.6K).

- The reaction in mkt pricing of RBA hikes has been ltd. RBA Dep. Gov. Debelle

spoke Weds, suggesting that unemployment may fall further than it has done in

prev. instances before wages pick up. This points to a limited RBA reaction

function in the case of a lower unemp. rate absent an uptick in wages

(especially when driven by a lower part. rate).

- The domestic 3-/10-Year cash yield differential dealt ~2.0bp flatter at

~65.0bp, with the AU/U.S. 10-Year yield spread last at ~-48.0bp.

- 3-Month BBSW fixed ~0.3bp higher today, with repo rate operations holding

above 2.00%. Bills moved lower, with the strip closing 1-5 ticks softer.