The brief, limited weakness for XM.....>

AUSSIE BONDS: The brief, limited weakness for XM on the lack of RBA ACGB

purchases more than reversed. YM last prints +0.5, XM +2.5, as the curve

flattens a touch. Hard to assign the uptick in the long end to any real

catalyst, especially given the very limit month-end extension flows. The lack of

RBA ACGB purchases comes after a period of tapering and in the wake of Governor

Lowe noting that "with conditions more settled at the moment, our plan for the

immediate future is to schedule any bond auctions we conduct for three days each

week - Mondays, Wednesdays and Thursdays. That does not mean that we will

necessarily purchase bonds on each of these days. Whether or not we do so will

depend upon the yield on 3-year government bonds and on market functioning."

- In the short-end, Bills sit unchanged to 2 ticks higher through the reds. The

overnight cash rate fixed unchanged at 0.13%, with ES account surpluses

steadying around A$65-70bn in recent days.

- Local private sector credit data was much stronger than exp., but had no

impact. PPI data, as well as CoreLogic house prices and the latest AOFM weekly

issuance schedule headline on Friday.