The front end of the curve was well....>

AUSSIE BONDS: The front end of the curve was well bid on the back of Westpac

adjusting their RBA call to 3 cuts in 2019 (from 2 previously). They now look

for the RBA to cut the cash rate in June, August and November, futures have

edged back from best levels since. YM +4.0 ticks, with XM +4.5 ticks, the move

in the front end following the release of note allowed the curve to unwind some

of the flattening that was observed in early trade. YM/XM trades at 44.5 ticks,

with the cash equivalent at 41.7bp. XMM9 easily absorbed the release of the

details of the first auction of the new 1.50% 21 June 2031 ACGB. The coupon is a

little lower than some expected (some desks looked for 1.75%). The size of

A$3.0bn represents a solid chunk of the AOFM's remaining planned issuance for

the year (which had less than A$5.0bn remaining).

- Bills run 1-4 ticks higher through the reds. Selling of the IRZ9H0 spread had

already been highlighted ahead of Westpac's change in view, with further selling

of that spread noted in the wake of the call.

- RBA repo ops saw A$780mn of 19-day ops dealt at an average of 1.577%, with

A$1.205bn worth of 60-day ops dealt at an average of 1.506%.