AUCTION‌ ‌PREVIEW: ACGB Apr '26 Supply Due

The Australian Office of Financial Management (AOFM) will today sell A$1.0bn of the 4.25% 21 April 2026 Bond, issue #TB142. The line was last sold on 23 July 2021 for A$700mn. The sale drew an average yield of 0.5124%, at a high yield of 0.5150% and was covered 6.6000x. There were 53 bidders, 13 of which were successful and 5 were allocated in full. Amount allotted at highest yield as percentage of amount bid at that yield was 23.9%.

• Increased uncertainty, whether that be via the Evergrande or other channels, coupled with a chunky enough sized coupon should support takedown at today's auction.
• The backdrop of record liquidity in the domestic banking system, international relative value appeal and the RBA-adjusted negative net supply dynamic will support takedown, with the previously outlined factors likely to build on these areas of support.
• One desk has noted that liquidity may be a touch thinner than the norm owing to the school holiday backdrop in Australia, although this shouldn't be a major stumbling block for the auction.
• Results due at 0200BST/1100AEST.