RBA Gov. Lowe's speech was the focal...>

AUSSIE BONDS: RBA Gov. Lowe's speech was the focal point of the SYCOM session.

The Gov. reiterated that unconventional MonPol remains unlikely in Australia. He

outlined 0.25% as the ELB, pushing back against the idea of -ve interest rates.

Lowe noted that the Bank has "no appetite to undertake outright purchases of

private sector assets", and that the threshold for undertaking QE "has not been

reached & I don't expect it to be reached in the near future;" but such measures

would be considered "IF there were an accumulation of evidence that, over the

medium term, we were unlikely to achieve our objectives... Our current thinking

is that QE becomes an option to be considered at a cash rate of 0.25%, but not

before that." Lowe outlined the RBA's preferences re: QE as covering gov't bonds

(including state), via the secondary mkt, but framed this as a low prob.

outcome. Bond futures knee-jerked lower before recovering & rallying in

overnight trade, with light curve steepening at the fore. YM +4.5 & XM +2.0 at

writing, leaving YM/XM at 36.5. Bills -1 tick to +5 ticks through the reds.

- Q3 completed construction work & A$1.2bn worth of ACGB 1.50% 21 June 2031

supply headlines today's local docket.