The complex has struggled to turn......>

AUSSIE BONDS: The complex has struggled to turn bid, with Bonds operating around

the session lows that were registered at the SFE open.

- Monday's SYCOM session saw the space follow U.S. Tsys lower, although Aussie

Bonds have continued to outperform Tsys, for reasons we have highlighted before,

with the AU/U.S. 10-Year spread some 2bp wider at ~-25bp in early dealing,

before retracing to -23.5bp last.

- The domestic 3-/10-Year yield differential has continued to steepen from the

recent low, last 2.1bp higher at ~56.5bp.

- 10-Year futures closed bellow the bull channel base off of the May lows on

Monday, with the contract now sandwiched between the key MA's.

- Repo rates have continued to ease, with today's 16 day operation yielding

1.892%, still some ~39bp over the cash rate.

- The Bill strip is mixed with the front 2 contracts 1 to 2 ticks higher, while

the remainder of the strip trades unchanged to 3 ticks lower.

- Participants await the AU CPI release, due tomorrow.