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

AUSSIE BONDS: MNI MARKETS ANALYSIS: Aussie Bills Weekly Update - August 30, 2019

- The whites have generally underperformed at the margin this week.

- RBA Dep. Gov. Debelle suggested that the floor for the cash rate is likely

~0.0-0.5% in a Q&A session. Debelle also noted that if rates got down to "around

0.5%" then the Bank would have to consider "other options." Debelle's comments

were not surprising given the recent commentary from Gov. Lowe & the release of

the mins from the RBA's Aug MonPol decision. Although the Bank prev. suggested

that unconventional MonPol in Australia is an unlikely outcome at present, and

that a package of measures tends to be more effective than any single unorthodox

measure in isolation. This was backed up by the understanding in our latest

insight piece. Some market participants deemed this a bit of a push back against

the idea of negative rates.

- On the data front Q2 capex & completed construction work were disappointing,

presenting downside risks to next week's Q2 GDP print. The RBA MonPol decision

will provide the other notable point of interest next week.

- 3-Month BBSW has shed ~1.5bp W/W but operates above the all-time lows.