Westpac: A$ Buyside Flow Surged In August

Westpac flow analysis reveals that their preferred measure of activity (net $A flow delta, 20-day rolling sum) "surged back into net buying territory in August. Indeed, the net buyside flow was the largest since September '16. Breaking the flow down by participant, the strong buyside was evident across funded accounts, offshore real money and sovereigns. Domestic real money accounts were less active, but have returned to marginal positive territory having been net sellers in July, while corporate activity continued to dwindle. Demand for ACGBs dominated all other product categories, which, considering the fact that there was A$36.5bn in ACGB supply in August, might suggest that supply begat the demand (note we have removed primary portfolios from our data set). The demand was also seen across the curve, which is not surprising given that all investor cohorts participated, although we do note that the >10yr maturity was again very popular, which suggests that the yield seeking behaviour that has characterised demand in the AU bond market for the past decade remains a key influence."