ACGB May-41 Supply Passes Smoothly

Smooth enough digestion of the ACGB May-41 auction, with the more than palatable ~A$350K DV01 on offer being aided by the combination of a prevailing yield a little below the 4.00% level, although the factors that we alluded to pre-auction (a lack of pickup on a cross-market basis, last week’s firmer than expected CPI data, the Monday timing issue and the fact that the bond is part of the “unloved” zone of the curve) likely capped overall demand, resulting in the cover ratio printing at a comfortable 2.95x. The weighted average yield printed 0.65bp through prevailing mids, per Yieldbroker. The bond is unchanged vs. pre-auction levels when it comes to post-supply price action.