Renewed global equity weakness.........>

AUSSIE BONDS: Renewed global equity weakness allowed 10-year Aussie futures to

hold their Sep 26 lows at 97.20 but the recovery has been week with gains capped

at 97.25. The 3-year future is underperforming, down 1.5bps to trade at 97.86,

below yesterday's lows.

- 10-year cash yields have recovered early loses to trade down just 1.4bps at

2.754%, with the 2s-10s curve seeing bearish flattening, trading at 69.20bps,

edging down from 8-month highs.  

- The AU-US spread has risen from last week's lows and sits at -48.1bps, up 5bps

from Friday's low. The real yield spread has also narrowed 2bps from yesterday's

low to -21.57%.