RBC go long ACGB Apr-33s at............>

AUSSIE BONDS: RBC go long ACGB Apr-33s at EFP+15.25bp, targeting 10bp, stop at

17.5bp. "While most attention is on the new Dec-30, we think there is better

value slightly higher up the curve. Tactically, we think there is room for this

bond to perform. Carry/rolldown is historically quite steep for this part of the

curve, especially as it is getting inexorably closer toward 10y basket entry.

Performance out of supply seems to be a pattern globally. We also think there is

a chance supply fears in AU are a little overdone near term. Although the AOFM &

State issuers will need to fund historically large deficits this FY & next, we

think they have already made enough inroads to be quite substantially ahead of

where they need to be pro-rata. A quicker than originally planned expected

re-opening of the economy & some underspend on key programs (especially

JobKeeper) are also good news for budget bottom lines, and may eventually result

in a lower task than we had forecast, at least for this FY. Today's new 10yr

bond will put the AOFM even further ahead, reducing the need to consider

establishing another new 10yr bond this FY."