Space traded at the whim of U.S. Tys...>

AUSSIE BONDS: Space traded at the whim of U.S. Tys on SYCOM, with the early bid

more than unwinding as market started to question how much of a systemic issue

the Coronavirus is. This leaves futures softer than settlement in early Sydney

trade, YM -4.0, XM -5.5, as the curve bear steepens. 10s sit ~1.0bp wider vs.

U.S. Tsy counterparts.

- Bills printing 3-5 ticks lower through the reds.

- Domestic focus falls on today's Q4 CPI print. Last week's labour market report

has seemingly taken the edge off of next week's RBA decision (at least if you

ask market, with IBs pricing a ~20% chance of a cut, back from the ~80% seen in

October), although some still maintain their calls for a cut in Feb (with most

acknowledging the risk that the move is deferred). Consensus looks for a steady

headline reading of +1.7% Y/Y, with risks seemingly skewed higher, albeit

marginally. Trimmed mean measure seen slowing to +1.5% Y/Y from +1.6% in Q3,

while the weighted median measure is seen steady at +1.2%. Expect focus to fall

on the underlying measures.