ACGB Jun-35 Supply Sees Firm Enough Pricing, Cover Limited By Pipeline Issuance

The latest round of ACGB Jun-35 supply sees the weighted average yield print 0.83bp through prevailing mids (per Yieldbroker), extending the recent trend of firm pricing at ACGB auctions, although the cover ratio wasn’t particularly strong, albeit still residing at comfortable levels, above the 2.00x mark. As flagged in our auction preview, the need to bring the line “up to size” and the impending syndication of a new ACGB Dec-34 line may have limited bidding. There was no notable movement in XM futures post-supply (ACGB Jun-35 is not in the underlying basket for the contract), while the bond was also little changed vs. pre-auction levels in cash trade.