The space has moved higher as Trump....>

AUSSIE BONDS: The space has moved higher as Trump ordered US Trade Rep. to

identify an additional $200bln in Chinese goods to levy tariffs on. The domestic

3-/10-Year yield diff & AU/US 10-Year spread operate around familiar levels.

- AU Q1 house price data & the minutes from the RBA's June MonPol decision due

today. June's decision saw the intro of risks around Italy & a few EM economies.

Removed language around the reduction in spare capacity in the econ. The Bank

also added that "while there may be some further tightening of lending

standards, the avg m'gage int. rate on outstanding loans is continuing to

decline." The RBA's econ. view didn't change.

- Since then an impressive Q1 GDP release makes the RBA's GDP exp. more

achievable. In a subsequent address Gov Lowe noted that a higher rate of wage

growth is needed in order for inflation to hit the midpoint of the Bank's tgt.

May's labour mkt report showed that the underemployment remains elevated. Lowe

has noted that the next move in rates is likely up, but given the trend in wages

and inflation there is no need for higher rates anytime soon. The lack of

pressure from mkts over pricing a rate hike will suit the RBA.