The space has consolidated higher......>

AUSSIE BONDS: The space has consolidated higher following broader based risk off

flows in the early part of the Asia-Pacific session with recent buyside flow in

US Tsys adding further layers of support.

- 3-Year Bond futures last trade at 97.830 (+5.0 ticks), while 10-Year Bond

futures last sit at 97.335 (+5.0 ticks).

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

differential last 3.1bp flatter at 55.8bp, while the AU/US 10-Year spread has

narrowed to -14.8bp.

- 3-Month BBSW fixed 1bp higher again today, although the overriding driver of

the Bill strip has been the  movement in underlying bonds, the white-red

contacts are 1 - 4 ticks higher across the board.

- Having bounced from ahead of the 55-DMA (92.307) follow through on fresh 2mth

highs had been lacking for 10-Year Bond futures, although XMM8 is now > the

Bollinger band top (97.3245). Bulls need a close > 97.3300 to confirm a break

and shift focus to 97.3850-5373 where 100 & 200-WMAs are noted. Bears now need a

close < 97.2750 to ease bullish pressure and < 97.1750 to target 2018 lows.