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

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.