CBA note that "The AOFM appears to.....>

AUSSIE BONDS: CBA note that "The AOFM appears to be settling into something of a

routine. Once again they are issuing A$4bn of nominal bonds and A$3bn of T-notes

this week. We commented at the time of the JobKeeper re-costing that there was

some chance the AOFM might lower their borrowing requirement. As it turns out

they haven't done so, explicitly, but there has been something of an alteration

in the implementation. We're expecting the AOFM will lower issuance further once

we move past June 30. For example, even A$4bn per week is roughly A$200bn in a

year. The target for this year is A$130bn of nominals. If, as we expect, the

AOFM issues something between A$110 and A$150bn of nominals next financial year,

that will still be a step down in issuance on a weekly basis. Even our maximum

expectation of A$150bn, averaged more out more evenly over the year, is only

A$3bn per week. The swing factor will be the T-note issuance. At present, while

things are going quite well economically and the country is re-opening, the

T-note issuance is small. We expect the AOFM will run down their issuance of

T-notes in 2020-21, but having set the precedent, will probably use T-notes to

cover any short-term unexpected deviations in the borrowing requirement."