RBA Governor Lowe formally opens up....>

AUSSIE BONDS: RBA Governor Lowe formally opens up the possibility of a near term

rate cut ahead by writing that "a lower cash rate would support employment

growth and bring forward the time when inflation is consistent with the target.

Given this assessment, at our meeting in two weeks' time, we will consider the

case for lower interest rates."

- Lowe tipped his hat to the recent labour market dynamics and highlighted that

wage growth is too slow to be consistent with the inflation target. He also

pointed to limited inflation pressures across much of the economy.

- Bond futures are threatening a clean break above their respective SYCOM peaks

after turning bid post-Lowe. YM +1.5 ticks, with XM +1.0 ticks. YM/XM trades at

47.0 ticks, reversing the earlier flattening and more, with the cash equivalent

at 43.5bp.

- Bills move into the green and trade 1-4 ticks higher through the reds, with

IRM9 understandably outperforming.

- OIS price a near 70% chance of a cut next month, up from the 50% seen

following the APRA proposal made earlier today.