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

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

(AOFM) will today sell A$1.2bn of the 1.50% 21 Jun 2031 Bond, issue #TB157. The

line was last sold on 4 September 2019 for A$800mn. The sale drew an average

yield of 0.9640%, at a high yield of 0.9650% and was covered 4.0888x. There were

43 bidders, 16 of which were successful and 6 were allocated in full. Amount

allotted at highest yield as percentage of amount bid at that yield was 86.1%.

- The larger than usual size of today's tender is probably a result of the (now

completed) futures roll and forms the only round of ACGB issuance this week,

which may aid takedown, despite the large size of singular line issuance. The

supply maintains the AOFM's focus on the 9-12 Year sector of the curve.

- The recent backup in yields from cycle lows (last 1.1655%, ~23bp back from

recent lows), coupled with the prospect of further RBA easing and increased

geopolitical risk, may help takedown. Although, it is worth cautioning that the

line looks a rich vs. the surrounding lines on a cash flow basis, and is also

pretty rich in term (but not vs. ACGB April '33 on a term basis).

- Results due at 0200BST/1100AEST.