AUCTION PREVIEW: ACGB Apr-29 Supply Due

The Australian Office of Financial Management (AOFM) will today sell A$800mn of the 3.25% 21 April 2029 Bond, issue #TB138. The line was last sold on 26 August 2022 for A$700mn. The sale drew an average yield of 3.4492%, at a high yield of 3.4550% and was covered 2.9286x. There were 57 bidders, 20 of which were successful, and 17 were allocated in full. The amount allotted at the highest yield as a percentage of the amount bid at that yield was 2.0%.

• The outright cheapening witnessed month to date should be beneficial for demand, with a degree if stabilsation observed in recent sessions, while the line’s cycle peak, just above 4.00%, has not been challenged.
• There isn’t much to flag in terms of micro-RV, with the line looking fairly priced in net terms across the relevant metrics.
• The bond falls into the “unloved” section of the ACGB curve, although the yield on offer should mean that the auction passes smoothly.
• Results are due at 0100BST/1100AEDT.