Westpac write that this week "could....>

AUSSIE BONDS: Westpac write that this week "could establish the near-term market

tone & medium-term valuations. While it is clear that there will be no rate

change following the RBA meeting, there will be considerable interest in the

Statement & the subsequent communications, including a speech by Dr Lowe the

following day & Friday's SoMP. Significant attention will be directed to the

RBA's updated forecasts for growth. Westpac's forecasts are significantly lower

than those presented in the Nov SoMP. While there will be some revision lower,

the Bank will likely continue to f'cast above trend growth, which should

continue to support the view that the next move in rates will be up. That view

is materially different to current market pricing, where there is a greater than

50% chance of a rate cut factored-in by mid-'20. The question is whether the RBA

rhetoric will provide some concession to this current market pricing or actively

attempt to dissuade the market from moving toward factoring in a greater chance

of cuts. We will wait and see, however we believe that the risk rewards suggest

a bearish bias for AU futures this week. That should also provide some slight

steepening bias along the term structure, mostly at the very front end."