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

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

(AOFM) will today sell A$800mn of the 2.50% 21 May 2030 Bond, issue #TB155. The

line was last sold on 5 June 2019 for A$900mn. The sale drew an average yield of

1.5477%, at a high yield of 1.5500% and was covered 2.6711x. There were 31

bidders, 14 of which were successful and 6 was allocated in full. Amount

allotted at highest yield as percentage of amount bid at that yield was 24.3%.

- The line forms part of the underlying basket for XMU9.

- The line's yield sits 6bp or so of the low that was lodged back in late June.

- As mentioned prev., AOFM issuance has focused on the 10-Year sector of the

curve in recent weeks. Monday's 3.25% 21 April '29 offering was deemed week by

some when comparing the mid-price at the time of supply to the avg yield, which

saw the avg yield top the mid-price by 0.01bp. This could be a rejection of the

low yield environment, but we need to look for further evidence of this. The

longer duration of the line at today's auction should help promote the return of

demand, although the line looks a little rich on ASW terms.

- Results due at 0200BST/1100AEST.