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The Australian Office of Financial.....>

                                            AUSSIE BONDS: The Australian Office of Financial Management (AOFM) will today
                                            sell A$400mln 5.75% May 2021 bonds, issue #TB124. The issue is part of the
                                            underlying basket for the 3-Year future, which should support demand.
                                            - The line has A$30.199bln outstanding, with a modified duration of 2.93 years.
                                            - The bond was last sold on September 8 for $600mln, the auction drew an average
                                            yield of 2.0164%, a high yield of 2.0175%, with a cover ratio of 7.0400. In the
                                            secondary market the issue currently yields 2.135%.
                                            - The domestic 3-/10-Year spread has widened in February, sitting around 75bp
                                            last, while back in September, at the time of the previous auction, it was
                                            operating between 55 & 65 bp, although the Aussie curve has continued to
                                            outperform the US.
                                            - Earlier this week HSBC suggested that the belly of curve looks cheap in ASW &
                                            barbell terms and recommended selling 3 & 15-Year paper against the 7-Year to
                                            form a butterfly.
MNI London Bureau | +44 0203-865-3809 |
MNI London Bureau | +44 0203-865-3809 |

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