The curve sits a touch flatter vs......>

AUSSIE BONDS: The curve sits a touch flatter vs. settlement levels in early SFE

trade, with YM +1.0 tick and XM +3.0 ticks. YM/XM trades at 41.0 ticks, with the

cash equivalent at 37.1bp.

- RBA Asst. Gov. Kent spoke early on today. His initial address covered the

Committed Liquidity Facility and was fairly bland as Kent noted that local

lenders can lift holdings of local bonds and pay more to use the facility owing

to the proportional decline of foreign buy and hold investors of Australian

paper.

- In subsequent remarks Kent noted that there is a low chance of QE in

Australia, and that the RBA is a "long way" away from that, although he stressed

that the Bank will adjust policy to meet its targets if needed.

- Bills deal 1 tick lower to 1 tick higher through the reds.

- The local docket is empty for the remainder of the day.