VIEW: TD Securities note that "the.....>

AUSSIE BONDS: VIEW: TD Securities note that "the modified duration of Australian

bond indices is set to lengthen to fresh records on the coming index

rebalancing. Also monthly extensions across the Treasury (ACGB), Government

(ACGB + Semis) and the Composite 1yr+ Bond indices are the second largest on

record. ACGB 1yr+ index extensions > 0.25yrs have on average driven yields

lower, the bond curve flatter, 10yr swap EFPs wider and compressed the AU-US

10yr in the week of the extension. However, the drop in outright yields and the

widening in swap spreads the week into elevated monthly extensions has

historically flipped the following week (i.e. yields edge higher and swap

spreads compress). For those investors looking to hold a position into and after

the index extension, prior moves suggest holding onto bond curve flatteners."