The space continued its recovery.......>

AUSSIE BONDS: The space continued its recovery with the 3-Year future last at

97.910 (+2.0 ticks) while the 10-Year future last traded at 97.250 (+4.5 ticks).

- The space has stabilised over the last few hours after the soft Q4 CapEx

release (albeit with a notable upward revision to Q3), which was preceded by

decent 2 way flow.

- The domestic 3-/10-Year curve has continued to flatten, with the yield

differential last trading 1.5bp flatter at 68.1bp.

- The AU/US 10-Year spread has moved further in to negative territory, last

2.3bp lower at -11.3bp.

- The white bill contracts are flat to a tick higher.

- The 10-Year future topped out in front of layers of resistance which remain in

the 97.2600-3220 region including 100 & 200-DMAs and the 200-WMA. Bulls need a

close above the 200-DMA to hint at a move back to 97.5200 Dec highs and above

97.3850 2018 highs to confirm. Bears still need a close below 97.1750 to shift

focus back to 97.0037-0450 where 2018 lows and the LT bull channel base are

noted.