AUCTION PREVIEW: A Familiar Picture

The Australian Office of Financial Management (AOFM) will today sell A$2.0bn of the 1.50% 21 June 2031 Bond, issue #TB157. The line was last sold on 16 September 2020 for A$2.0bn. The sale drew an average yield of 0.9395%, at a high yield of 0.9400% and was covered 4.9275x. There were 45 bidders, 13 of which were successful and 4 were allocated in full. Amount allotted at highest yield as percentage of amount bid at that yield was 90.6%.

• The downtick in the AOFM's issuance rate, coupled with the duration adjustments to the ACGB indices at month-end will likely prove to be supportive factors for this round of supply, adding to the ample liquidity and seemingly imminent RBA easing backdrop.
• ASWs and swap spreads are back from their recent extremes, but that shouldn't weigh too much on demand, given that the RBA easing/slower AOFM supply dynamic seems to be the driving factor behind those particular moves.
• The line forms part of the XMZ0 basket.
• Results due at 0000GMT/1100AEDT.