In a note released late on Monday TD...>

AUSSIE BONDS: In a note released late on Monday TD Securities recommended

selling the ACGB April 2023 line against a long position in the ACGB May 2028

line.

- The strategists note that TD's US rate strategists are fading the move higher

in yields and look for a dovish tilt in this week's release of the FOMC May

Meeting Minutes.

- TD believe that the spread is nearing technical resistance and also believe

the position looks attractive from a relative value basis in that "the ACGB

04/23 is 2.3 s.d. rich & the ACGB 05/28 is 1.9 s.d. cheap to the deviation from

the fitted curve over the past 6 months. Also the fair ACGB 04/23-05/28 is the

cheapest vs the actual spread since the ACGB 05/28 was issued in May 2016."

- TD also note that "curve flattener positioning is light."

- TD suggest that risks to the trade include "US 10-Year yield breaking above

3.125%, Japanese selling of 10-Year US Tsys or ACGBs or the market scaling back

rate hike expectations."