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The space has moved away from worst....>

AUSSIE BONDS
AUSSIE BONDS: The space has moved away from worst levels posted early in the SFE
session, although it remains range-bound. 3-Year futures last trade at 97.890
(-1.0 tick) while 10-Year futures last trade at 97.205 (-1.5 ticks).
- The domestic 3-/10-Year yield differential has narrowed by 1.5bp to 71.6bp,
while the AU/US 10-Year spread hovers around -7bp (-1.3bp last).
- In terms of international money flow ANZ note that "we would normally expect a
slowing in demand from Japan into the end of the financial year, but the
alternative markets like US Treasuries are not finding favour due to high hedge
costs. So, for issuers, the option of finding longer end demand in AUD through
their respective Euribor/Libor curves means supply should continue to come to
market."
- The short end is softer, with the front end of the white Bill contracts
leading the way after BBSW once again fixed higher. The white-red contracts
trade unchanged to 3 ticks lower. 
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com

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