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ACGB Dec-35 Supply Easily Digested

AUSSIE BONDS
StoryAPACFixed Income BulletsAustraliaMarkets

Expectations of sustained strong pricing at auctions proved accurate, with the latest round of ACGB Dec-35 supply seeing the weighted average yield print 0.47bp through prevailing mids (per Yieldbroker).

  • The higher outright yield and steep curve likely aided the absorption of today’s ACGB supply. The cover ratio nudged higher to 3.000x from 2.6625x in the previous auction. Additionally, there was a notable increase in the number of participants, with 37 bidders compared to 28 previously.
  • As highlighted in our auction preview, global bond sentiment has notably worsened over recent months, with the US 10-year Treasury yield sitting around 80bps above its mid-September low. This shift likely weighed on demand at today’s auction.
  • Following the auction, the ACGB December 2035 cash line and the XM futures contract have both traded slightly richer.
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Expectations of sustained strong pricing at auctions proved accurate, with the latest round of ACGB Dec-35 supply seeing the weighted average yield print 0.47bp through prevailing mids (per Yieldbroker).

  • The higher outright yield and steep curve likely aided the absorption of today’s ACGB supply. The cover ratio nudged higher to 3.000x from 2.6625x in the previous auction. Additionally, there was a notable increase in the number of participants, with 37 bidders compared to 28 previously.
  • As highlighted in our auction preview, global bond sentiment has notably worsened over recent months, with the US 10-year Treasury yield sitting around 80bps above its mid-September low. This shift likely weighed on demand at today’s auction.
  • Following the auction, the ACGB December 2035 cash line and the XM futures contract have both traded slightly richer.