The space has continued to track.......>

AUSSIE BONDS: The space has continued to track Tsys and eased from best levels

throughout SYCOM dealing as US stock indices moved back from session lows, with

AU Bonds outperformance holding firm, as the AU/US 10-Year yield spread hovers

around -26.0bp, while the domestic 3-/10-Year yield differential continues to

trade sub 55bp.

- The front end of the Bill strip remains pressured heading into quarter end as

financials begin to hoard cash. 3-Month BBSW fixed 2.94bp higher today,

indicative of the rise that had been been seen in forward yields.

- Participants await the auction of the Nov '22 Bond & comments from RBA Gov.

Lowe in European hours after the minutes of the Reserve Bank of Australia's June

board meeting (released yesterday) appeared broadly optimistic but strangely

omitted the guidance that the next move in the cash rate is more likely to be

up, rather than down.