The space has consolidated at..........>

AUSSIE BONDS: The space has consolidated at session highs in the wake of the

softer than expected domestic labour market report and a steady bid in US Tsys

post-FOMC.

- 3-Year Bond futures last trade at 97.810 (-1.5 ticks), with 10-Year Bond

futures last at 97.295 (+1.0 tick).

- The domestic 3-/10-Year yield differential is now 2.6bp flatter at 58.5bp,

while the AU/US 10-Year spread has moved back from session tights to last trade

at -18.8bp.

- Repo rates & BBSW fixes continue to grind higher as we head into quarter end,

although the move in Bonds has pulled the Bill strip back from session lows,

with the white & red contracts unchanged to a tick lower.

- In lieu of today's labour market report, CommSec suggested that "there is no

pressing need for the Reserve Bank to change interest rate settings.

Under-employment & under-utilization rates continue to trend lower but still

indicate that spare capacity is available in the job market."