Futures drew support from a heavy......>

AUSSIE BONDS: Futures drew support from a heavy start for Asia-Pacific equities,

before edging back from best levels as equity supportive measures/rhetoric from

the PBOC and Chinese regulators alleviated some of the negative sentiment, while

the space ignored the latest Chinese GDP release.

- The domestic 3-/10-Year cash yield differential last trades at 63.5bp, ~1.0bp

flatter. AU paper's outperformance vs. Tsys has allowed the AU/U.S. 10-Year

yield spread to move back to -50bp.

- The AOFM's planned issuance schedule failed to deliver any upsized issuance,

in spite of Monday's ~A$9.5bn worth of redemptions.

- 3-Month BBSW fixed ~0.15bp lower today. IRZ8 volume has been heavy. Shorter

dated Bill contracts have underperformed, last dealing unchanged to 3 ticks

lower, with the reds unchanged to 3 ticks higher last. Similar moves were

observed in the U.S. Eurodollar strip on Thursday, as the front end was

pressured by a higher 3-Month $ LIBOR fix.

- Focus this weekend falls on a key local Australian by-election, which has the

potential to remove the ruling govt's slim majority.