25 May– 29 May 2015

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ACGB 3y were down 16bps on the week to 1.90% and 10y were down a larger 19bps to 2.72%.  The week began quietly with holidays in the UK and US. There was some nervousness regarding a possible Greek exit from the euro but the weak Capex data and private sector credit saw a strong rally from bonds as it presaged a weaker Australian economy. There were reports of other central banks buying ACGBs and a tender on Friday saw a bullish result as the yield was almost a full 1bp below the mid-point prior to the tender. This week sees the RBA rate announcement and the release of GDP numbers.

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ACGB 30y on the cards

In a speech covering the progress and expectations in developing the ACGB market the CEO of the AOFM has said that Australian government bonds with a 30y tenor could be inevitable. The AOFM is “open to the prospect of a further curve extension, including to 30 years”. He also said that the AOFM was optimistic that the recent announcement of a 20y futures contract would help promote liquidity and prompt semis and corporates to issue long-dated paper.

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AUST GOVT BONDS

MATURITYCOUPON (%)ISSUE SIZE ($M)CLOSING YIELD? WEEK? MONTHWEEK HIGHWEEK LOW
21-Oct-154.75138981.99-0.020.142.011.99
15-Jun-164.75218991.89-0.060.111.961.89
15-Feb-176210951.88-0.110.151.991.88
21-Jul-174.25188991.88-0.130.182.011.88
21-Jan-185.5204991.88-0.160.182.051.88
15-Mar-195.25214461.95-0.180.222.131.95
21-Oct-192.75103002.04-0.170.242.222.04
15-Apr-204.5203962.1-0.170.252.282.1
21-Nov-201.7520002.22-0.172.222.42.22
15-May-215.75215992.28-0.160.312.452.28
15-Jul-225.75181992.44-0.170.332.622.44
21-Apr-235.5212992.53-0.180.342.722.53
21-Apr-242.75215002.65-0.190.392.842.65
21-Apr-253.25168002.73-0.190.412.922.73
21-Apr-264.25148002.79-0.190.412.982.79
21-Apr-274.75136992.85-0.190.43.042.85
21-Apr-293.2596992.99-0.190.423.182.99
21-Apr-334.598003.13-0.20.443.333.13
21-Jun-352.7570003.27-0.190.483.463.27
21-Apr-373.7570003.3-0.190.493.493.3

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