The 10-Year Aussie Bond Benchmark......>

AUSSIE BONDS: The 10-Year Aussie Bond Benchmark moved very in tune to U.S. Tsys

on SYCOM, NY opened higher on some block trading and the Aussie 10-Year soared 5

ticks upwards, the 3-Year was less attentive to Tsy's and only moved 2 ticks on

the bidding. On SFE both the 3-Year and the 10-Year have moved within a two tick

range, the 3-Year is currently down 1 tick from yesterday's Asia-Pac close and

the 10-Year is up half a tick on yesterday's Asia-Pac close.

- Today the Australian Office of Financial Management (AOFM) issued A$3.5bln

short dated 2022's at a coupon of 2.25% (higher than the current 3-Year yield of

2.122%,) the auction was the largest issue on record from the AOFM but cover

came in lower than the yearly average of 4.46x at 3.68x and with a record number

of bids. Despite sources reporting 8k of Aussie 3's was lifted at 97.83 post

auction, the two benchmark contracts stood firm, a reminder this is a bear

market.

- The yield curve is almost flat, the largest spread being between the

2-/10-Year at 0.6bp, more give on the short end, the 3-Year yield is up 0.3bp.