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ACGB May-34 Auction Goes Smoothly With More Demand Present

AUSSIE BONDS

Expectations of sustained strong pricing at auctions proved accurate, as the weighted average yield printed 1.28bps through prevailing mids (per Yieldbroker) and the cover ratio moved higher to 3.6437x from 3.1125x at the February auction.

  • The more dovish assessment of the RBA’s policy outlook, combined with a still elevated outright yield, a low level of issuance, and the line’s inclusion in the XM basket all look to have contributed to today’s bidding.
  • The ACGB May-34 cash trade is 0.5bp cheaper in post-auction dealings, with XM slightly cheaper.

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