Futures followed the gyrations seen....>

AUSSIE BONDS: Futures followed the gyrations seen in Tsys overnight, finishing

the SYCOM session a shade higher, before easing in the early part of the SFE

session. YM/XM spread trades at 52.5, cash 3-/10-Year spread trades at ~54bp.

- RBA's Debelle garnered some interest in London hours, stating that "the RBA

has repeatedly said that our exp. is that the next move in MonPol is more likely

up than down, though it is some way off. But should that turn out not to be the

case, there is still scope for further reductions in the policy rate. It is the

level of interest rates that matters and they can still move lower. We have also

been able to examine the experience of others with other tools of MonPol & have

learned from that. Hopefully, we won't ever have to put that learning into

practice. QE is a policy option in Australia, should it be required." This put a

small bid into the space overnight. Debelle seemed relaxed when questioned on

recent GDP data, perhaps suggesting that his initial comments in the speech

allude to broader scenario analysis, as opposed to any central RBA discussions.

- AOFM weekly issuance schedule due today, focus to turn to next week's NAB biz

conf & house price data.