XM has edged back from pre-RBA lows,...>

AUSSIE BONDS: XM has edged back from pre-RBA lows, to last trade -2.5, with YM

unchanged on the day, leaving the curve a little off intraday steeps, although

tomorrow's ACGB 2031 supply is at likely to be at least partially factoring into

long-end underperformance. There was little to shock as the RBA left MonPol

settings unchanged and outlined its baseline economic scenario, given comments

from Governor Lowe a couple of weeks back, while the Bank reiterated its pledge

to do what is necessary to maintain the functioning of the ACGB market and its

3-Year yield target. It also noted that "given this outlook, the Bank will

maintain its efforts to keep funding costs low in Australia and credit available

to households and businesses. The Board is committed to do what it can to

support jobs, incomes and businesses during this difficult period and to make

sure that Australia is well placed for the expected recovery." As a result it

loosened the collateral restrictions for accessing OMOs (the only real curve

ball from the RBA), with this move potentially providing some support for XM.

- Bills -1 to +1 through the reds.

- Local data was predictably grim.