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The Australian Office of Financial Management (AOFM) will today sell A$300mn of the 1.75% 21 June 2051 bond, issue #TB162. The line was last sold on 13 February 2023 for A$300mn. The sale drew an average yield of 4.1786%, at a high yield of 4.18% and was covered 3.0266x. There were 57 bidders, 18 of which were successful and 8 were allocated in full. The amount allotted at the highest yield as a percentage of the amount bid at that yield was 98.5%.

  • A slightly higher outright yield, a steeper curve and the unwinding of micro—RV richness between Mar-47/Jun-51 should all work to generate a baseline level of demand that should assist the auction's takedown of the longest line on issue.
  • Although the AU/US 30-year yield differential is lower compared to the level observed at the 13 February auction (16bp versus 28bp), it currently resides comfortably within the range of 0-40bp, which it has traded in since November. This should support offshore demand and help offset any uncertainties investors may have regarding RBA policy.

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