Westpac's flow analysis reveals that...>

AUSSIE BONDS: Westpac's flow analysis reveals that their "preferred measure of

activity (net $A flow delta, 20-day rolling sum) surged back into net buying

territory in June. Indeed, the net buyside flow was the largest in at least 2

years. Breaking the flow down by participant, strong buying was evident across

all investor cohorts, which is a good sign. While all real money accounts were

net buyers, it was funded accounts that recorded the largest buyside flow, which

suggests that some of their motivating factors, such as carry and yield are

encouraging a return to the market after thee group were heavy sellers in prior

months. Demand for ACGBs dominated all other product categories, which,

considering the fact that there was $32bn in ACGB supply in June, might suggest

that supply begat the demand. 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."