AUCTION PREVIEW: The Australian........>

AUSSIE BONDS: AUCTION PREVIEW: The Australian Office of Financial Management

(AOFM) will today sell A$150mn of the 1.25% 21 Feb 2022 Bond, issue #CAIN409.

The line was last sold on 12 Feb 2019 for A$150mn. The sale drew an average

yield of 0.2366%, at a high yield of 0.2475% and was covered 3.5333x. There were

36 bidders, 14 of which were successful and 12 was allocated in full. Amount

allotted at highest yield as percentage of amount bid at that yield was 50.0%.

- Medium term Australian break-evens (proxied by 5s) continue to operate just

above the recently minted all-time low. 5-Year inflation swaps also operate just

off of their cycle low. This gives the impression that the market does not

believe that the recently delivered rate cut, coupled with the prospect for

further cuts, which the market currently prices, will deliver the required

uptick in consumer prices over the medium term.

- Results due at 0200BST/1100AEST.