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

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

(AOFM) will today sell A$1.0bn of the 1.25% 21 May 2032 Bond, issue #TB158. The

line was last sold on 20 May 2020 for A$2.0bn. The sale drew an average yield of

1.0672%, at a high yield of 1.0675% and was covered 3.7125x. There were 46

bidders, 14 of which were successful and 3 were allocated in full. Amount

allotted at highest yield as percentage of amount bid at that yield was 53.6%.

- Recent market dynamics have driven the line to post-March vol outright cheaps,

last yielding ~1.180%.

- The smaller than recent norm size of the auction and continued roll towards XM

basket inclusion should support takedown today, although participants will be

weighing up the recent steepening of the curve vs. prospects of further

steepening on the gradual global re-opening story, and also assessing the RBA's

inactivity in recent weeks (reminder that the Bank doesn't currently hold ACGBs

this far down the curve). These matters reflect some potential headwinds, but

overall, smooth digestion is expected.

- Results due at 0200BST/1100AEST.