The Australian Office of Financial.....>

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

A$600mln of 2.25% 21 May 2028 on Wednesday, issue #TB149 which is part of the

underlying basket for the 10-Year future (XMH8).

- The line was last sold on December 6 for A$900mln, the sale drew an average

yield of 2.5846%, a high yield of 2.5825% with 84.6% of bids at the high and was

covered 2.5889.

- The issue has A$23.9bln outstanding with a modified duration of 9.02 years.

- The AU/US 10-Year yield spread is last at 3.3bp, narrowing from a 2018 high of

28bp. The spread dipped into negative territory earlier this week, it has not

seen a sustained dip below zero since 2000. Wednesday's US CPI release could be

key for the spread's dynamic in the short term, after the RBA maintained a

dovish tone and the short end has repriced chances of a 2018 hike to 60% from

70% last week.

- Results due at 0000GMT/1100AEDT.