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 Nov 2028 Bond, issue #TB152. The

line was last sold on 26 November 2018 for A$600mn. The sale drew an average

yield of 2.6418%, at a high yield of 2.6425% and was covered 4.6633x. There were

27 bidders, 11 of which were successful and 3 were allocated in full. Amount

allotted at highest yield as percentage of amount bid at that yield was 38.3%.

- The 1st ACGB auction of the new FY should see decent enough demand given the >

ample levels of liquidity evident, although bids may be a little lighter than

observed in the 9-12 sector, given the continued movement of the line away from

the XM futures basket & the associated cheapening that tends to follow. A lower

duration weekly issuance task from the AOFM could prove supportive.

- The line yields ~0.80%, hovering around the mid-point of the range established

since the March vol. passed. ASWs sit at elevated levels in terms of recent

history. The line isn't attractive to Japanese or U.S. investors in FX-hedged

yields terms, when compared to their own domestic sovereign offerings.

- Results due at 0200BST/1100AEST.