VIEW: Friday saw Westpac recommend.....>

AUSSIE BONDS: VIEW: Friday saw Westpac recommend buying ACGB 3.25% 2039 &

selling a duration weighted amount of ACGB 2.50% 2030 at a spread of 60.5bp,

targeting 50bp, with a stop at 68bp. They would put 75% of total risk on the

trade, providing room to add if there are better levels provided by "the

inevitable global bearish corrective phases." They note that "Friday's

announcement by Treasury re: the JobKeeper is a significant change and, as a

result, we should expect a significant market re-evaluation of the AOFM's gross

issuance programme for 2020-21. We think that, over time, the broader

implication will be for the shape of the 10-30yr bond curve. We have chosen the

20yr part of the curve to execute this view, given it is typically more liquid.

While the AOFM has stated that it will issue a new 30-Year bond next fiscal

year, we expect that this re-calibration of supply expectations will limit the

need to issue size into this part of the term structure. Once a new 10yr yield

level has been established, we expect that yield enhancement flows and curve

relative value comparisons will eventually favour a flatter term structure

beyond that maturity."