Soft domestic building approvals.......>

AUSSIE BONDS: Soft domestic building approvals data provided a light bid for the

space, but the reaction was muted, and later faded, as U.S. equity index futures

ticked higher. YM last trades unch., with XM -0.5 tick. YM/XM trades at 53.0

ticks, with the cash equivalent at 49.2bp.

- Focus returns to domestic shores next week, with the RBA's latest monetary

policy decision headlining. The question is, will the soft Q1 CPI print push the

RBA's hand, or will it continue to rely on its assessment of the labour market

to guide its hand? There is also some talk the Bank could undertake some

macroprudential easing, as opposed to headline monetary policy tweaks. The

cut/no cut debate is a close one, 13 of the 25 economists surveyed by Bloomberg

look for a cut, while OIS markets price a ~40% chance of such a move.

- Next week's AOFM issuance schedule looks a little light, with a A$900mn round

of XM basket bond issuance providing the sole ACGB offering.

- Bills trade 1 tick higher to 1 tick lower through the reds. RBA repo

operations saw A$2.41bn worth of repos dealt across the 14-, 32- & 73-day

tenors, at average yields of 1.588%, 1.617% & 1.569% respectively.