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VIEW: Westpac note that "with the......>

AUSSIE BONDS
AUSSIE BONDS: VIEW: Westpac note that "with the majority of maturities out of
the way, the amount of cash made available through repo looks unlikely to fall
much further - if the RBA were to maintain the average daily pace of June then
outstanding repo balances would be around $90bn by month end. The market is also
demanding more cash than the RBA intends to deal which suggests to us that there
is no real reason to expect a major shift in cash market dynamics in the near
term. Another factor is the availability of funds in the TFF - total drawdowns
of the TFF have risen over the June so far but still pale in comparison to what
banks could borrow before turning to alternate funding markets. So that all
leads to our view that ADIs will remain flush with liquidity, and money market
demand has been significant enough to hold BBSW below effective cash, so a
reduction in the Surplus ES balance is not necessarily a sign that these rates
need to surge."
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com

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