The space operated around Friday's.....>

AUSSIE BONDS: The space operated around Friday's closing-slightly lower levels,

although a solid auction of a 10-Year Bond basket constituent helped to underpin

the space.

- 3-Year Bond futures last trade at 97.690 (-4.0 ticks) while 10-Year Bond

futures last trade at 97.120 (-6.0 ticks).

- The latest auction result isn't all that surprising given the recent run of

strong results in the auctions of the shortest Bond in the 10-Year futures

basket, which has now spread into the longest line eligible for delivery.

- The domestic 3-/10-Year yield differential last trades 2.0bp steeper at

59.0bp, while the AU/US 10-Year yield spread sits 0.6bp wider at -10.7bp.

- 3-Month BBSW fixed unchanged today which has provided a degree of support to

the front Bill contract, which trades a tick lower, while the remainder of the

white & red contracts trade 2-3 ticks lower.

- Immediate focus falls on tomorrow's domestic CPI release & an address from

RBA's Kent.