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 -24.0bp last.

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

recent low, last 2.0bp 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 its 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 white contracts unchanged to 2 ticks higher,

while the remainder of the strip trades 1 to 4 ticks lower.

- Participants await the AU CPI release, due tomorrow.