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Westpac interpret the "bearish price...>

AUSSIE BONDS
AUSSIE BONDS: Westpac interpret the "bearish price action of late last week as
more a clean out of longs than a re-evaluation of near term economic and policy
risks. We expect the ongoing RBA cycle to keep rates low for longer. Hence, we
will be either long or neutral in both a tactical and strategic sense over the
coming weeks. It is too early to expect yields to rise on an improving economic
outlook. We are neutral at current levels but tactically we would be better
buyers on dips, especially those led by U.S. price action. We await an extreme
before entering. The curve is very long end directional given how much RBA
easing is in the forward profile. Fade any US-led steepening back toward the
50bp region.
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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