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

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

(AOFM) will today sell A$1.5bn of the 2.50% 21 May 2030 Bond, issue #TB155. The

line was last sold on 3 April 2020 for A$600mn. The sale drew an average yield

of 0.8118%, at a high yield of 0.8125% and was covered 4.0917x. There were 52

bidders, 12 of which were successful and 5 were allocated in full. Amount

allotted at highest yield as percentage of amount bid at that yield was 95.8%.

- Line yields ~0.85% after a volatile couple of months on COVID-19 & YCC

matters. ASW spread sits just shy of the recent peak, after briefly venturing

into +ve territory last week. The 3-/10-Year spread sits ~33bp off YtD flats,

though the YtD picture is muddied by the vol around the RBA's YCC announcement.

- Yesterday's AGCB coupon payments may support demand, although the moderation

in the # of RBA ACGB purchases per week & its view that there isn't any need to

extend the maturities of its ACGB holdings, at least for now, may provide

headwinds, especially when coupled with the > than usual size of supply. This

may limit strength of auction when compared with the shorter dated alternatives

on offer this week (backstopped by YCC). Results due at 0200BST/1100AEST.