Overall a very quiet session for.......>

AUSSIE BONDS: Overall a very quiet session for Aussie bonds, futures move into

the close higher though saw subdued trade, the short end in particular

rangebound after an initial move higher.

- The drivers of price action were not domestic despite a bond auction, RBA

speaker and IMF report on Australia. Instead Aussie bonds took their lead from a

risk off tone and rise in UST's after German coalition talks failed and tax bill

wrangling continues in the US.

- The AOFM sold A$400mln of 3.25% 2029 bonds, the sale was taken down smoothly

but cover dropped to 4.98 from 6.50 last time out. Some of the drop in cover was

attributed to a drop in hedged bond yields for Aussie 10's as AUD/JPY falls.

- The IMF in their annual report on Australia predicted modest GDP growth and

said it expects a lower for longer rate environment.

- Yields fell across the curve, some bull steepening seen during the session.

The long end more susceptible to moves overseas while short end stays anchored.

3-/10-Year spread last 2bp tighter.