YMZ8 & XMZ8 sit back from best.........>

AUSSIE BONDS: YMZ8 & XMZ8 sit back from best levels after the softer than

expected GDP data propelled the contracts higher, allowing them to challenge YtD

highs based on continuation charts.

- The soft GDP print came constructive trade rhetoric from China's MOFCOM

allowed the contracts to edge back from opening levels. In BBG headlines MOFCOM

noted that "China is to push forward with U.S. trade negotiations over the 90

day period." MOFCOM stressed that the trade meeting was "very successful" and

that it is "confident that it can execute the trade talk results." More balanced

commentary from U.S. President Trump via TWTR tempered the move pre-GDP.

- Curve is back from early flats, with the 3-/10-Year cash yield differential

last ~53.0bp.

- Today saw a lacklustre auction of a XMZ8 basket bond.

- The Bill strip remains flatter, although the Reds have moved back from highs,

with the white and red contracts 1 tick lower to 4 ticks higher last, with

3-Month BBSW fixing ~0.3bp higher today. Focus on year end funding requirements.

- Focus now moves to an address from RBA's Debelle, due tomorrow.