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RBC Adjust Market View After AOFM Borrowing Task Outlined

AUSSIE BONDS

RBC note that they saw “the budget as a slight negative for ACGBs given the degree of additional spending and tax cuts, but the most important aspect is probably the potential RBA reaction function to this extra stimulus. Today’s funding announcement took out the risk of fresh ACGB underperformance that a A$150bn+ task might have brought with it, though; hence, we’re unlikely to see any AU/U.S. underperformance, bond basket widening, or swap spread tightening from here, which could be pinned down as specifically a function of the issuance program.”

MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com

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