The Aussie futures curve has...........>

AUSSIE BONDS: The Aussie futures curve has flattened, with both major contracts

at best levels as they benefit from the broader defensive feel to the session;

YM +1.0, XM +3.5.

- A fairly sensationalist lead from the AFR re: an old story surrounding Chinese

port inspections of iron ore got some attention, but seemed misplaced, which was

confirmed as the Australian Trade Minister welcomed the move by China.

- RBA Gov. Lowe offered nothing new of note via panel, focusing on bank capital

and confidence, as he reiterated the well-trodden policy stance of the RBA.

- The flash CBA PMI readings for May were grim, as outlined earlier, but the

text of the release suggested the worst may nearly be behind the Australian

economy (although that may of course depend on Sino-U.S. and Sino-Australian

relations).

- Bills unchanged to -2 through the reds.

- On the cash flow front, it is worth reminding that today saw ~A$3.13bn worth

of ACGB coupons paid out. Elsewhere, Friday will see $A3.75bn of Notes mature.

- A$2.0bn worth of ACGB '24 supply headlines tomorrow.