NICHOLL There is a combination of factors here. The RBA’s participation in the market featured heavily in the investor updates we did during April and May. We took the opportunity to reinforce what we thought the view was from the RBA’s actions at the time: that it did not see structural support across the curve as key to achieving its monetary-policy objectives.

In addition, the bulk of market-clearing activity required was bonds from the belly of the curve that had quickly accumulated on trading accounts.

These were bonds sitting on investors’ books that are in a part of the curve where we are not normally very active as an issuer. They are bond lines that don’t tend to attract a lot of interest until they roll towards the three-year futures contract.

I think investors were first looking to sell liquid bonds followed by those that they were less likely to buy again quickly. I do not think a huge volume of ultra-long-end stock changed hands, because of the duration risk.

All the signals we have seem positive for long-end interest, including the return of Japanese investors, the steepness of our curve relative to other sovereigns and the RBA’s clear signal that it will not be buying in the long end – which some investors may appreciate because the RBA will not be creating distortions. These factors are making investors happier to look for opportunities in the long end. Don’t forget, some volatility is a good thing.

The Australian market stands out in a global context because we have not had to go down the path of other jurisdictions, where it has become difficult for investors to interpret market signals because of the scale of central-bank activity.

We will benefit from this and we are beginning to see it in the long end. I am not surprised it has taken a relatively long time for conditions at this point of the curve to recover, though. Volatility is still in place due to other factors and while it remains high it no doubt brings with it some aversion to duration risk.

TRIGONA I see the RBA’s role as being to stabilise markets, not to buy across the yield curve. With the steepness of the yield curve there is a pickup for investors at the long end. This is what is happening now, with Japanese investors coming into this space. We are also seeing demand from Europe.

LOFTING The other point to make is that the RBA’s objective in buying was about making markets more efficient by clearing excess positions on bank balance sheets rather than funding semi-government borrowers.

Clearing out risk in shorter maturities frees up the banks to take on risk at the back end of the curve. I don’t think there was a lot of 10-15 year semi-government stock sitting on bank balance sheets – more was with end investors.

FAJARDO The RBA could have targeted longer bonds but it may have crowded out investors in the longer end by setting artificially low yields and a flatter yield curve. As Rob Nicholl mentioned, the steepness of the curve and attractiveness of long-dated Australian dollar bonds compared with other bond markets are an important driver of the demand we are seeing.

GRICE The Australian market is trying to find an equilibrium level for the whole term structure of the bond curve and then the relative spread to semi-governments. The 10-30 year curve in Australia is around 10 basis points steeper than in the US and it feels like we are at a level that is bringing in the marginal investor from offshore. The ultra-long end of the Australian curve has always been a little bit tricky but it is continuing to normalise and see increased activity.

It is hard to quantify the expected concession for a new 30-year sovereign bond. But it feels like the current mid-80s basis points on 10-30 years is about the right equilibrium level for now.

BARRELLE The RBA has avoided nominal bonds with maturity greater than 10 years, and inflation-linked bonds altogether, in its bond-buying programme. This has allowed these markets to be somewhat free trading and find their equilibrium levels. In the long run this can be good for these sectors as it provides volatility and trading opportunities for investors.