Aussie bonds gained ahead of the.......>

AUSSIE BONDS: Aussie bonds gained ahead of the Aussie bond auction for A$1.5bln

2022's and moved upwards in tandem with U.S. Tsys as sources reported 6.5k TYZ7

was bought at 125-14+ and TYZ7 126/126.5 call spread paper pays '06 for 3k -ref

125-14+, 14d. The 3-Year contract was last at 98.050 and the 10-Year was last at

97.140.

- The first and prior issue of the abovementioned line of bonds was on October

11, it was the largest issue on record from the AOFM, and results came in with a

record number of bids. Today bids were almost half of what they were for new

issue prior and bid/cover was higher today at 4.5067x from 3.6797x... The cover

for the prior auction was lower than the yearly average.

- The AOFM has announced it will restart the RMBS divestment process through

regular auction, back in Feb 2016 the auctions were suspended, the first auction

will be on November 23.

- Yields are up on the short end and down on the long end, the 3-/10-Year spread

last at 2.1bp.