Westpac Enter Long 10-Year ACGB Vs. Short 10-Year U.S. Tsy

Westpac note that "despite U.S. 10yr bond yields falling 4bp last week,
Australian bonds were unable to rally, with yields unch. on the week. We
think that is directly linked to this week's ACGB supply. While there might
be some residual need for the market to digest July's record issuance, we
think that at 30bp over US 10yr bond yields, it is time to enter AU
outperformance trades (buy ACGB 2.50% May 30 vs sell a duration-
weighted amount of UST 0.625% May-30 @31.0bp, targeting 20.0bp with
a stop at 36.0bp). The small drift higher is not due to a re-pricing of
monetary policy exp. (18-month forward spread has not widened) &
hence the play is purely about accessing yield in a world of significant
liquidity. One limiting factor might be the high currency, however, for those
who invest on an unhedged total return basis, our view is that the
AUD/USD will be at $0.72 by year end."