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AUSSIE BONDS: ACGB Jun-31 Supply Faces A lower Yield But A Steeper Curve

AUSSIE BONDS
BulletAPACFixed Income BulletsAustraliaMarkets

Today’s sale of A$700mn of the 1.50% 21 June 2031 bonds faces an outright yield for this line that is around 10bps lower than observed at the previous auction and approximately 40bps lower than the high of 4.48% recorded in November 2024.

  • Several other factors could also influence the bidding at today’s auction. First, the 3/10 yield curve is near its steepest since mid-2022.
  • Secondly, ACGBs have been supported by expectations of an RBA easing cycle as early as February, with markets pricing an 85% probability.
  • Also on the positive side, sentiment toward global bonds has improved in recent weeks, potentially bolstering demand.
  • On the negative side, the line is not included in the XM basket and sits in a less preferred area of the curve.
  • Despite mixed factors, today’s auction will likely provide further insights into demand dynamics for ACGBs amidst shifting market expectations.
  • Results are due at 0000 GMT / 1100 AEST.
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Today’s sale of A$700mn of the 1.50% 21 June 2031 bonds faces an outright yield for this line that is around 10bps lower than observed at the previous auction and approximately 40bps lower than the high of 4.48% recorded in November 2024.

  • Several other factors could also influence the bidding at today’s auction. First, the 3/10 yield curve is near its steepest since mid-2022.
  • Secondly, ACGBs have been supported by expectations of an RBA easing cycle as early as February, with markets pricing an 85% probability.
  • Also on the positive side, sentiment toward global bonds has improved in recent weeks, potentially bolstering demand.
  • On the negative side, the line is not included in the XM basket and sits in a less preferred area of the curve.
  • Despite mixed factors, today’s auction will likely provide further insights into demand dynamics for ACGBs amidst shifting market expectations.
  • Results are due at 0000 GMT / 1100 AEST.