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

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

(AOFM) will today sell A$100mn of the 2.50% 20 September 2030 I/L Bond, issue

#CAIN408. The line was last sold on 26 November 2019 for A$100mn. The sale drew

an average yield of -0.2372%, at a high yield of -0.2325% and was covered

3.2000x. There were 31 bidders, 12 of which were successful and 12 were

allocated in full. Amount allotted at highest yield as percentage of amount bid

at that yield was 100%.

- 10-Year BEIs last deal at 1.34%, some ~30-35bp off the cycle lows witnessed

back in September, after failing to hold above 1.50% earlier this year. Westpac

suggest that "inflation expectations remain benign, however we believe we have

seen the lows in BEIs. We would not expect BEIs to move back above 2% in 2020."

Elsewhere, it is worth remembering that the RBA nudged its Q2 headline CPI

forecast lower in the latest SoMP, while many economists continue to point to an

overoptimistic round of growth projections from the RBA, which, when coupled

with limited wage growth (by historical norms), could limit inflation further.

- Results due at 0000GMT/1100AEDT.