The slow grind higher extended into....>

AUSSIE BONDS: The slow grind higher extended into the close, and picked up pace,

more than reversing the early losses, leaving YM +3.5 and XM +2.5 on the day.

Curve finished back from early steeps, YM/XM +1.0 at 47.5 as the long end

unwound a chunk of its early underperformance. As mentioned earlier, very little

to drive the move on the headline side, coupled with a very limited flow

backdrop, which makes the move all the more curious.

- The final Dec CBA m'fing PMI was a touch softer than flash, 49.2 vs. 49.4. CBA

noted that "the manufacturing downturn was led by the steepest rate of decline

in new orders in the series history during December. Inflows of new sales fell

for a third straight month despite rising exports. This in turn contributed to

another fall in backlogs of work, where further evidence of spare capacity

dampened hiring. Job shedding was reported for the first time in three months,

with the rate of decrease the second sharpest seen since the survey began just

over three-and-a-half years ago."

- Bills closed 1-5 ticks higher, only flow of note there saw small buying of

IRU0U1 early on.