Aussie dlr retreats on swine flu worries; bonds up

* Aussie slips as swine flu virus hurts risk appetite

* Aussie bond futures up; yield curve steepens again

SYDNEY, April 27 (Reuters) - The Australian dollar slipped
on Monday on concerns the swine flu gripping Mexico may spread
further, potentially delaying a recovery in the world economy.

The Aussie AUD=D4 fell more than 1 cent to $0.7129, from
a high of $0.7239 offshore, little changed from $0.7122 seen
here late Friday. It was also steady on the yen at 68.98 yen
AUDJPY=, compared to Friday's 69.12.

"This is about the last thing the global economy needs
right now," said Robert Rennie, an analyst at Westpac.

"Given that much of the recovery for the moment is based on
confidence rather than activity, an outbreak of swine flu could
be major risk for growth outlook," he said.

As a major commodity exporting nation, Australia is highly
sensitive to the global growth outlook.

The swine flu virus, which has killed 103 people in Mexico
so far, has spread to Canada and United States, with suspected
cases in Europe, Israel and New Zealand. [ID:nN27484099]

For more related stories, double-click on [nFLU].

Amy Auster, an analyst at ANZ, said near-term resistance
for the Aussie had formed around its 200-day moving average of
$0.7249, adding that it looked over-valued at current levels
and was likely to fall back towards $0.7000.

News of the spread of swine flu swept away any lingering
positive sentiment from upbeat corporate earnings and economic
data out of the United States on Friday and positive comments
from senior economic officials.

President Barack Obama's economic adviser Lawrence Summers
said at the weekend that the U.S. economy was stabilising
[ID:nN26489274], while finance leaders at the Group of Seven
meeting said the global economic crisis was showing signs of
easing.

Investors took refuge in safer U.S. dollar .DXY and yen
JPY=, as well as government bonds.

Three-year Aussie bond futures YTTc1 were up 0.08 points
at 96.585, while the 10-year contract YTCc1 gained 0.04 to
95.535.

The spread between three- and ten-year bond futures widened
yet again to 1.05 points, from Friday's 1.015.
---------------(Snapshot at 4:15 p.m./0615
GMT)----------------- FUTURES
CASH YIELD 90-DAY BILL 90-DAY BILLYBAc1 (JUN) 97.08 (+0.02)
AU3MBB=RR 3.07 (3.07) 3-YR BOND YTTc1 (JUN) 96.585(+0.08)
AU3YT=RR 3.43 (3.50) 10-YR BOND YTCc1 (JUN) 95.535(+0.04)
AU10YT=RR 4.67 (4.70) AUD/USD AUD= 0.7129 (0.7122) US
10-YR US10YT=RR 2.94 (2.93)
----------------------------------------------------------------
AUD VS 2-YR 10-YR *AUD 3-YR/10-YR SPREAD
USD +221 (+226) +173 (+177) *FUTURES +1.05 (+1.015)
CAD +216 (+222) +166 (+171) *AUD 2-YR/10-YR SPREAD
NZD -57 (-51) -64 ( -61) *CASH +153 (+150)
----------------------------------------------------------------

For Reuters data on current Australian bond pricing,
double-click on YIELDBROKER.
(Reporting by Koh Gui Qing)