ANZ suggest that "a tap of one of......>

AUSSIE BONDS: ANZ suggest that "a tap of one of the ultra-long lines (2041s or

2047s) by the AOFM seems likely, after issuance into this part of the curve has

taken a pause. While we think the scope for outperformance of this part of the

curve is limited for now, due to liquidity conditions in the ACGB market still

not being back to their pre-COVID levels, the absolute level of the yield on

these bonds may prove attractive to buy-and-hold investors. On an outright

yields basis, the March 2047 and May 2041s are both trading close to 30bp wide

of their duration-matched UST equivalent. If we put the ACGB curve into USD xccy

asset swap terms though, it is trading rich, across the entire curve, relative

to the duration-matched UST lines. The spread is narrowest for the March 2047s -

reflecting both the wide spread in outright terms and the inversion of the

AUD/USD cross currency basis curve at the ultra-long end. Our expectation is

that ultra-long end of the basis curve will steepen (ie 10s/30s less negative)

with time as Australian banks restart their Tier 2 issuance. This will lead to

the March 2047s outperforming in USD xccy ASW terms, even if the ACGB

2030s/2047s curve remains steep."