The shorter end of the curve has.......>

AUSSIE BONDS: The shorter end of the curve has come under some modest pressure

after the RBA reinstated the line that the next move in the cash rate would

likely be up, rather than down, in the minutes of the July MonPol meeting.

- The RBA also pointed to quarter end flows as the driving force behind the

recent round of tightening in funding rates, with no mention of demand for

Australian securities, tighter money supply and the move in cross currency basis

swaps.

- 3-Month BBSW fixed some 1.3bp lower today, while longer dated repos fixed

above 2.06%. The lower BBSW fix has supported the front end of the Bill strip

with the white contracts last trading 1-3 ticks higher, while the red contracts

trade unchanged to a tick lower.

- Focus remains on the pricing of the new ACGB 2.75% 21 May 2041 Treasury Bond,

IPT stood at 39.5-44.5bp over the primary 10-year Treasury Bond futures

contract, with participants also looking to the domestic labour market report,

due on Thursday.