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

AUSSIE BONDS: MNI MARKETS ANALYSIS: Aussie Bills Weekly Update

- The white pack underperformed this week as the RBA failed to deliver a rate

cut, allowing some recovery in short dated rate benchmarks.

- That being said exp. of a rate cut haven't alleviated, with interpolated OIS

pricing an 85% chance of at least one cut by year end. Bills pulled back from

RBA reaction lows during the latter half of the week, aided by broader risk-off

flows largely pertaining to the escalation of the U.S.-China trade spat.

- The RBA's latest SoMP failed to deliver an outright easing bias, but the Bank

did slash its 2019 GDP projections, even as it accounted for market pricing re:

rate cuts. The SoMP also placed additional focus on the labour market re: the

outlook for the RBA's MonPol decision.

- Focus next week turns to the latest labour market report (with increasing

attention set to fall on second tier labour market data such as vacancies from

both the ABS & SEEK over the coming months, in addition to the labour market

components of the business surveys), wage price index and NAB Business Survey.

Also worth highlighting that RBA Deputy Governor Debelle will speak on Monday.