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

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

(AOFM) will today sell A$1.0bn of the 1.50% 21 June 2031, issue #TB157. The line

was last sold on 26 February 2020 for A$800mn. The sale drew an average yield of

0.9474%, at a high yield of 0.9475% and was covered 3.8438x. There were 39

bidders, 10 of which were successful and 1 was allocated in full. Amount

allotted at highest yield as percentage of amount bid at that yield was 88.1%.

- Line yields 0.7900%, ~15.0bp back from the coronavirus inspired lows in yield

terms.

- Speculation and comments from RBA Deputy Gov. Debelle re: a preference for YCC

at the RBA, if unconventional MonPol measures were required, will continue to

garner interest, and may lead to some volatility at auction in the coming

weeks/months. Recent outperformance of Tsys has the line trading at comparable

yields to U.S. 10s (on an unhedged FX basis), which may result in some demand

from abroad, although the outright richening may counter this.

- ASW spread hovers around the middle of its recent range.

- Results due at 0000GMT/1100AEDT.