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AUCTION PREVIEW: ACGB Apr-37 Supply Due

AUSSIE BONDS
Homepagemarkets-real-timeBulletMarketsFixed Income Bullets

The Australian Office of Financial Management (AOFM) will today sell A$1.0bn of the 3.75% 21 April 2037 bond. The line was last sold on 3 July 2024 for A$600mn. The sale drew an average yield of 4.5109%, at a high yield of 4.5125% and was covered 3.8083x. There were 36 bidders, 14 of which were successful and 7 were allocated in full.

  • This week's ACGB supply is in line with the recent weekly issuance range, with the sale of A$500mn of the 3.25% 21 April 2029 bond due on Friday.
  • According to the June 2024 Issuance Program Update, the AOFM plans to: conduct 2 Treasury Bond tenders most weeks; and hold 1-2 Treasury-indexed bond tenders each month. Issuance of Treasury Bonds in 2024-25 is expected to be around $90 billion. Around $2 billion will consist of Green Treasury Bond tenders.
  • Bidding at today’s auction is likely shaped by several factors. The outright yield is around 55bps lower than the July auction and about 115bps below the November peak.
  • Meanwhile, the 3/10 yield curve has steepened by 10-15bps since early July and is now near the mid-point of its range over the past year.
  • Additionally, sentiment towards global bonds has improved notably ahead of today’s FOMC decision, highlighted by the US 10-year Treasury yield recently reaching its lowest level this year, nearly 110bps below its April peak.
  • However, it’s important to note that this bond is not part of the XM basket.
  • While some factors may temper bidding strength, firm pricing is still expected at today’s auction.
  • Results are due at 0200 BST / 1100AEST.
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The Australian Office of Financial Management (AOFM) will today sell A$1.0bn of the 3.75% 21 April 2037 bond. The line was last sold on 3 July 2024 for A$600mn. The sale drew an average yield of 4.5109%, at a high yield of 4.5125% and was covered 3.8083x. There were 36 bidders, 14 of which were successful and 7 were allocated in full.

  • This week's ACGB supply is in line with the recent weekly issuance range, with the sale of A$500mn of the 3.25% 21 April 2029 bond due on Friday.
  • According to the June 2024 Issuance Program Update, the AOFM plans to: conduct 2 Treasury Bond tenders most weeks; and hold 1-2 Treasury-indexed bond tenders each month. Issuance of Treasury Bonds in 2024-25 is expected to be around $90 billion. Around $2 billion will consist of Green Treasury Bond tenders.
  • Bidding at today’s auction is likely shaped by several factors. The outright yield is around 55bps lower than the July auction and about 115bps below the November peak.
  • Meanwhile, the 3/10 yield curve has steepened by 10-15bps since early July and is now near the mid-point of its range over the past year.
  • Additionally, sentiment towards global bonds has improved notably ahead of today’s FOMC decision, highlighted by the US 10-year Treasury yield recently reaching its lowest level this year, nearly 110bps below its April peak.
  • However, it’s important to note that this bond is not part of the XM basket.
  • While some factors may temper bidding strength, firm pricing is still expected at today’s auction.
  • Results are due at 0200 BST / 1100AEST.