CBA note that "funding conditions......>

AUSSIE BONDS: CBA note that "funding conditions since the RBA's intervention, in

terms of repo, have been extremely well managed & abundant in source terms. The

daily repo rate is hovering at around 0.18% for 1 month, or ~6bp > OIS. This is

the narrowest spread for around 5 years. More recently, the RBA has scaled down

its daily ops, not because it is withdrawing from the market, but because demand

has fallen. Average daily OMO volumes sit at $A730m, more than $A1bn less than

that seen in Mar. Looking to June, the RBA's initial spike of offerings will

start to fall due. June will have $A46.3bn in maturities, with $A44bn of this

rolling off 9-29 Jun. The final week of June, being the FY end/quarter end for

some banks has $A13.3bn of maturities currently. We exp. that banks will seek to

shore up their repo funding ahead of time to carry them over the 30 Jun B/S.

This should lift the demand side of the equation & we would exp. the RBA to

match this demand... The surge of bond supply that has come to the market, from

ACGBs and Semis might also lift the overall need for funding. A sharp lift in

the requirement for repo funding could push the rate higher, or the spread to

OIS wider. A rise in the secured rate (repo) could lead to a rise in BBSW."