‌AUCTION‌ ‌PREVIEW:‌ ‌ACGB Jun '31 Supply Due

The Australian Office of Financial Management (AOFM) will today sell A$1.2bn of the 1.50% 21 June 2031 Bond, issue #TB157. The line was last sold on 30 April 2021 for A$1.0bn. The sale drew an average yield of 1.6882%, at a high yield of 1.6900% and was covered 3.3260x. There were 42 bidders, 12 of which were successful and 4 were allocated in full. Amount allotted at highest yield as percentage of amount bid at that yield was 75.0%.

• The ongoing combination of net negative RBA purchase adjusted weekly supply (at least until September) and ever swelling excess liquidity, as measured by the record level of surplus E/S balances lodged at the RBA (which hit new highs at the start of this week on the back of the maturity of ACGB May '21), will continue to underscore demand for ACGBs at auction.
• The hedgability of the line, which forms part of the XMM1 basket, will also aid demand.
• Results due at 0200BST/1100AEST.