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

AUSSIE BONDS: The space has continued to track Tsys after easing 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 -25.0bp, while the domestic 3-/10-Year yield differential

continues to trade sub 55bp.

- The auction of the Nov '22 Bond passed smoothly, with an in-line bid-to-cover

ratio when adjusted for auction size compared to the most recent round of supply

for that particular line.

- 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. The fix was

the highest since May 2016.

- Participants await 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.