RBC note that the gov't "announced a...>

AUSSIE BONDS: RBC note that the gov't "announced a A$22.9bn stimulus package

today, worth ~1.2% of GDP with measures to support both businesses, primarily

SMEs, and households. Several measures are targeted specifically at industries

directly affected by COVID-19. Front loaded with A$11bn to be deployed by 30 Jun

2020, the key measures are designed to boost Q2 GDP and avoid technical

recession. Active fiscal stimulus to support the economy is both necessary and

responsible. At this juncture, the heavy lifting needs to shift to fiscal

policy. Coupled with the cyclical deterioration in the economy since the Dec

MYEFO, the AOFM issuance task will almost certainly need to rise from previous

forecasts. The underlying budget position remains in deficit with the weaker

starting point to weigh on the forward estimates. We estimate the AOFM will have

to issue an extra ~$15bn in FY19-20 and ~$14bn in FY20-21 to account for both

today's stimulus package and underlying budgetary deterioration. While decent in

both size and design, the package is unlikely to derail further RBA easing,

including a final cut to terminal cash of 0.25% at the April meeting with the

risk the RBA signals the start of unconventional policy at the same time."