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Westpac note that "Friday's rise in....>

AUSSIE BONDS: Westpac note that "Friday's rise in U.S. Tsy yields has lifted AU
yields, with potential for more during the week ahead. The catalyst was the U.S.
payrolls report, which showed earnings growth at 2.9% annual, the highest since
'09. U.S. 10yr Tsy yields have risen from 2.81% in late Aug to 2.95%, and could
test 3.00% this week. A break above that level won't be easy, having failed
twice in Jun & Aug. Still, with potential for a 5bp rise in the U.S., we see
upside risk for AU bond yields, still resonating from the strong AU Q2 GDP
result. AU 10yr bond futures yields are testing 2.60%, with the next obvious
chart point being 2.65%. A lingering risk to bond bears is the U.S.-China trade
war, although we did notice that Friday's surprise announcement of an extra
$267bn hardly dented yields."
MNI London Bureau | +44 0203-865-3809 |
MNI London Bureau | +44 0203-865-3809 |

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