Westpac write that their "view that....>

AUSSIE BONDS: Westpac write that their "view that the RBA will cut 3 times in

'19 is not fully priced-in & should provide some ongoing support to the front

end. The longer maturities are more vulnerable to a bearish correction within

the range from US 10yr bonds. We are small net sellers this week but not overly

bearish & look to buy 3yr bond futures on dips < 98.80. We are getting closer to

putting on an RBA-led curve steepener, but it remains too early. We will need to

see how effective the delivery of rate cuts are before the recent flattening

trend is sustainably reversed. If the 3-10yr futures spread were to move to

40bps, we would enter a tactical steepener ahead of next Tuesday's RBA meeting.

BEIs are low but are awaiting confirmation that RBA policy is effective, we

think they will eventually trend higher from current levels. It is too early to

buy BEIs, however it would provide good participation in any global outright

sell-off. With RBA rate cuts expected in June, Aug & Nov, there are reasons for

the AU/US 10yr spread to continue to perform. Further outperformance will be

slow. The next major move will most likely occur on a further RBA-driven dip in

the currency."