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Westpac Enter AU/U.S. 10-Year Narrowers

AUSSIE BONDS

Westpac have entered a 10-Year AU/U.S. 10-Year yield spread tightener position at 43bp, with a target of 20bp and a stop at 60bp. They note that “with the RBA beginning its hiking cycle and the AU/U.S. 10-Year bond spread just off its widest levels in over a year, we believe now is a good opportunity to enter into cross market spread narrowers. Markets are pricing in a much more aggressive forward cash profile than Westpac’s forecasts, thus we believe there will be AU outperformance relative to the U.S. to come.”

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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