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

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

(AOFM) will today sell A$2.0bn of the 2.75% 21 November 2029 Bond, issue #TB154.

The line was last sold on January 13 2020 for A$800mn. The sale drew an average

yield of 1.2266%, at a high yield of 1.2275% and was covered 2.7500x. There were

34 bidders, 15 of which were successful and 5 were allocated in full. Amount

allotted at highest yield as percentage of amount bid at that yield was 75.7.7%.

- While the bond is still plenty liquid it hasn't been tapped for some time,

indeed this is the first tap of the line under the new market regime, so the

priors are somewhat useless re: comparative purposes. While the line currently

forms part of the underlying basked for XMM0 it could cheapen in coming months

as it moves towards losing its basket status and hedgability against 10-Year

futures diminishes. Indeed, the line already looks a little cheap on certain

measures, but the aforementioned reasoning may present headwinds to supply.

- The presence of a May '32 tender later in the week may also sap demand from

today's auction.

- Results due at 0200BST/1100AEST.