Westpac note that "the RBA's...........>

AUSSIE BONDS: Westpac note that "the RBA's purchases of government bonds in the

secondary market has so far outpaced the rate of supply. However, with the RBA's

pace of purchases slowing and a large fiscal deficit to fund, this will not be

the status quo for long. Weekly purchases of ACGB have fallen from A$14bn in the

first full week of the program, to just A$3.25bn last week. The RBA appear to be

tapering the size of auctions again this week, this morning announcing an

intention to purchase just A$500m across the two bond lines maturing in 2029.

Today's announcement marks not only the smallest operation but the most targeted

in terms of maturity range. On the other hand, we expect that the AOFM will need

to complete a long term funding task of around A$290bn across this financial

year and next. The AOFM will be borrowing A$6bn in bonds and A$2bn in Treasury

Notes this week, which if the RBA maintains its slower purchase pace, will

provide an important insight into non-RBA demand and the price the market is

willing to pay."