The space continues to trade around....>

AUSSIE BONDS: The space continues to trade around familiar themes, tracking

broader risk sentiment/US Tsys, with the domestic 3-/10-Year yield differential

hovering around 55bp & continued outperformance vs. US Tsys anchoring the AU/US

10-Year yield spread well into negative territory, although the latest leg lower

has seen the space marginally outpace US Tsys.

- The Reserve Bank of Australia is well and truly on hold, and the RBA hasn't

had to use forward guidance, Governor Philip Lowe said Wednesday, in a comment

that confirms an insight published by MNI earlier that the RBA's next rate move

message was never intended to be a form of forward guidance.

- 3-Month BBSW fixed another 2.6bp or so higher today, as repo rates surge on

quarter end/interest in AU assets from foreign investors. The white Bill

contracts have outperformed thus far, despite the higher fix, but have edged

back from best levels as Bonds move lower.

- 10-Year Bond futures 100-WMA (97.390) remains the key upside hurdle, while the

June 19 low (97.290) & hourly support from June 14 (97.2545) provide the initial

areas of downside interest.