TD Securities suggest that "for ACGB...>

AUSSIE BONDS: TD Securities suggest that "for ACGB yields the outlook for US

yields, European yields, and term premium is key. Given our forecasts for US and

European rates, the magnitude of a backup in ACGB yields should be capped by

around 20bps as well. As of the end of August, the 10yr AU term premium (as

calculated by the AOFM) was at year to date lows at -1%. For yields to rise

meaningfully in Australia, term premium needs to rise as well. Fundamentally, if

one assumes the RBA to be on hold for a prolonged period of time (supporting

lower term premiums), offshore factors are then likely to be key to any rise in

the term premium. Note, however, that a spike in Australian 10yr term premium

appears unlikely. Our US and EU forecasts imply 10yr ACGBs around 2.75% by year

end."