ACGB May-34 Supply Smoothly Digested

ACGB May-34 supply sees smooth enough digestion, with the weighted average yield printing a comfortable 0.99bp through prevailing mids (per Yieldbroker), while the cover ratio tops the 3.00x mark. The cheapness of the zone (that may prevail given the syndication of a new Dec-34 line that is scheduled to take place in the final quarter of the current FY), hedgability of the line and ongoing global market jitters seemingly combined to underpin demand. Questions re: the speed of issuance of the line, given its XM basket inclusion & newness (need to get it up to size), as well as the potential for some RBA repricing, given inflation levels and a still tight labour market, were outweighed by the aforementioned supportive factors. Incremental cheapening in the line and XM futures post-auction seems to be tied into moves in U.S. Tsys around the cash market re-open, as opposed to being driven by auction dynamics.