MNI MARKETS ANALYSIS: Aussie Bills.....>

AUSSIE BONDS: MNI MARKETS ANALYSIS: Aussie Bills Weekly Update May 03, 2019

- A relatively sedate week for the Bill space, with most contracts operating

within touching distance of last Friday's closing levels at writing. Offshore

matters have garnered more interest than domestic issues, with the latest FOMC

monetary policy decision and Chinese PMI data grabbing the limelight.

- Focus returns to domestic shores next week, with the RBA's latest monetary

policy decision headlining. The question is, will the soft Q1 CPI print push the

RBA's hand, or will it continue to rely on its assessment of the labour market?

There is also some talk that the Bank could undertake some macroprudential

easing, as opposed to headline monetary policy tweaks. The cut/no cut debate is

a close one, 13 of the 25 economists surveyed by Bloomberg look for a cut, while

OIS markets price a ~40% chance of such a move.

- Australian trade and retail sales data will cross ahead of the RBA decision,

with the RBA's quarterly SoMP due on Friday.

- In funding markets, 3-Month BBSW registered fresh record lows, while the RBA

offering plentiful amounts of notional during this week's repo operations.