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

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

(AOFM) will today sell A$800mn of the 1.50% 21 June 2031 Bond, issue #TB157. The

line was last sold on 17 July 2019 for A$1.6bn. The sale drew an average yield

of 1.4845%, at a high yield of 1.4875% and was covered 1.9312x. There were 41

bidders, 30 of which were successful and 19 were allocated in full. Amount

allotted at highest yield as percentage of amount bid at that yield was 37.2%.

- There are some conflicting signals as we head into today's supply. Outright

yields are historically rich, with the escalation of the Sino-U.S. trade war

driving the latest leg lower in yields. The line also looks rich in relative

terms, but has cheapened a touch vs. surrounding lines in recent sessions.

- Worth remembering that Friday's ACGB April 2029 tender was poorly received,

but the longer duration of the line on offer today will likely result in a

degree of underlying demand, although the aforementioned volatile backdrop may

limit overall demand. Also, the amount on offer today is half of what was

offered in the most recent tender of the line, which should prove supportive.

- Results due at 0200BST/1100AEST.