AUCTION PREVIEW: ACGB Apr '29 Supply Due

The Australian Office of Financial Management (AOFM) will today sell A$1.0bn of the 3.25% 21 April 2029 Bond, issue #TB138. The line was last sold on 24 June 2020 for A$2.0bn. The sale drew an average yield of 0.8450%, at a high yield of 0.8450% and was covered 3.3325x. There were 35 bidders, 3 of which were successful and 0 were allocated in full. Amount allotted at highest yield as percentage of amount bid at that yield was 92.0%.

• This week's ACGB supply has gone well, despite a pivot in AOFM strategy to auction 3 bonds in the 8-/12-Year sector of the curve, with the slate presenting a digestible level of DV01, negative RBA adjusted net issuance in play and mountains of cash in the form of surplus E/S funds lodged at the RBA looking for a home.
• Most desks seem to expect these factors, sprinkled with offshore demand and the recent steepening of the curve to support takedown at auction.
• Results due at 0000GMT/1100AEDT.