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The domestic 3-/10-Year yield..........>

AUSSIE BONDS
AUSSIE BONDS: The domestic 3-/10-Year yield differential has flattened on the
back of the stronger than exp. domestic labour market report (with a strong
headline beat driven by full time jobs and an uptick in the participation rate
noted), last dealing at lows ~ 52.5bp. Outright Bond futures trade around a tick
off of their lows after selling pressure gathered pace on the back of the
release, following earlier weakness tracking U.S. T-Notes.
- The Bill strip last trades 1-5 ticks lower, in sympathy with Bonds, after
3-Month BBSW fixed unchanged today. Early steepener interest was observed in
white contract spreads.
- Looking at the IB strip there has been no trades beyond IBK9 today, with that
contract pricing in ~5bp worth of tightening (based on mids), or a 20% chance of
a 25bp hike by the end of May next year.
- Participants' focus now turns to next week's AU CPI release.
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com

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