The Australian Office of Financial.....>

AUSSIE BONDS: The Australian Office of Financial Management (AOFM) will today

sell A$500mln of 2.25% May 2028 bonds, issue #TB149.

- The issue was last sold on July 28 for A$700mln, drawing 2.7266%, covered

3.84x. In the grey market the issue currently yields 2.655%, up 2.4bp on the

session. The line has A$18.3bln outstanding, modified duration of 9.43 years.

- Having spiked higher in late June/early July yields in Australia have given

back some of the gains across the curve as the RBA firmly hold on to their

dovish stance, Aussie bonds have also shown a resilience in the face of the

recent US/North Korea tensions. Recent speeches from the RBA have reiterated the

dovish mindset with RBA Assistant Gov. Kent today saying that the interest rate

is unlikely to rise any time soon. These comments are similar to those made by

RBA Gov. Lowe last week that the current market pricing of one hike by the end

of 2018 was broadly appropriate. Markets await wages and labour market data

later this week as well a speech from RBA's Ellis on Friday.

- The TB149 looks fairly rich on the curve at -6bp on an ASW basis but this is

unlikely to impact demand.