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ACGB-26 Supply Prices Well; Cover Slips


The latest round of ACGB Sep-26 supply went well on the pricing side, aided by the stabilisation away from cycle cheaps in ACGBS. The weighted average yield printed 1.83bp through prevailing mids (per Yieldbroker). On the other hand, the cover ratio moderated to 2.66x from the previous auction’s 3.40x, coming in far below the six-auction average at 4.03x, with international investors still seemingly sidelined, at least for the most part, given the uncertainty surrounding the degree of tightening that will be implemented by the RBA during the current cycle. This added to headwinds from the slightly higher DV01 on offer from the AOFM this week, with the marginal richness of the line in micro-RV terms (as flagged in our preview) providing another negative factor for demand.

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