On SFE the Aussie 3-Year rallied to....>

AUSSIE BONDS: On SFE the Aussie 3-Year rallied to monthly highs and took a 10

tick bid following the release of CPI figures which came in lower than expected

but higher than prior, the 10-Year took a 7 tick bid post data. The 3-Year

contract was last at 97.910 and the 10-Year last at 97.205. Most recent and

largest clip sources report traded offscreen is '13K YMZ7 bought at 97.90 and

91.' Steeping on the yield curve, 3-/10-Year spread at 3.2bp.  

-  On the overnight both benchmark contracts went lower alongside Tsy's amid

speculation that Fed Chair nominee Taylor might be the front-runner.

- Barclays on CPI: "Headline inflation rose by 0.6% on a q/q basis in Q3 from

0.2% in Q2, largely on the back of higher electricity and tobacco costs. On a sa

basis, headline CPI rose 0.4% q/q, flat from Q2 17. There was a modest softening

in underlying inflation, with trimmed mean inflation rising by 0.4% q/q and the

weighted median moderating to 0.3% q/q (Q2: 0.5%; Q1: 0.4%). On a q/q sa basis,

food and transport costs saw the biggest declines. However, the drop in food

prices appears to have been driven by lower prices of vegetables, which may

normalise in coming months."