The latest round of ACGB Apr-33 supply went well on the pricing side, with the weighted average yield pricing 0.83bp through prevailing mids (per Yieldbroker). The cover ratio declined to 2.46x (vs. the previous print of 4.11x), although not pointing to anything by way of worrying demand at those levels.
- As flagged in our preview, the continued move in ACGBs away from cycle cheaps and the hedgability of the line (due to its status as a basket bond for current XM futures) likely aided in generating baseline demand at the auction.
- The proximity of the auction to the FOMC later today likely contributed to the softer cover, with the lack of relative value weighing on demand as well.
- There was little by way of a meaningful move in ACGBs across the curve post-auction.