VIEW: Westpac have entered a...........>

AUSSIE BONDS: VIEW: Westpac have entered a receiving Feb 2020 RBA meeting OIS

position at 0.70%, targeting 0.50%, with a stop at 0.75%. They reason that

"market pricing for the RBA has changed significantly over the past fortnight.

The terminal rate has risen by almost 20bp, led mostly by risk positive

developments in the US. That has allowed us to take profit on our pay Dec-19

trade but also provided new opportunity to capture the market's divergence from

our view. We are of the view that the RBA will cut the cash rate to 0.75% in

October and again to 0.50% in February. The case for a lower cash rate is built

mostly on the absence of improvement in the labour market as well as a

concerning outlook for the consumer and growth. The market is currently pricing

only 30bp of easing by February, contradicting our - and the majority of

forecasters - expectation of 50bp of cuts by Q1 2020, so receive Feb-20 RBA at

these levels."