The space has started the week in......>

AUSSIE BONDS: The space has started the week in familiar territory, tracking

Tsys, with 10-Year futures topside failure from last week still providing the

most interesting point of note. The AU/US 10-Year spread trades around -20bp,

with the domestic 3-/10-Year yield differential a little flatter on the session.

- The Bill strip has been listless thus far, edging lower on a higher 3-Month

BBSW fix & strong domestic dataset.

- Q1 business inventories & corporate profits came in better than expected, and

therefore may offer some upside risk to Wednesday's GDP release. Additional GDP

inputs will be released tomorrow (net exports & public demand). Consensus looks

for a headline Q/Q GDP print of 0.8%, against Q4's 0.4%.

- Elsewhere the RBA will issue its latest MonPol decision on Tuesday with all of

those surveyed looking for the Bank to leave its cash rate unchanged at 1.5%. As

a result participants will scour the statement for any changes in rhetoric.

Rates markets are pricing in a mere 45% chance of a 25bp hike over the next 12

months, which is underpinning the shorter end of the yield curve.