AUCTION PREVIEW: ACGB Mar-47 Supply Due

The Australian Office of Financial Management (AOFM) will today sell A$300mn of the 3.00% 21 March 2047 Bond, issue #TB150. The line was last sold on 25 July 2022 for A$300mn. The sale drew an average yield of 3.6218%, at a high yield of 3.6250% and was covered 2.4600x. There were 48 bidders, 11 of which were successful and 5 were allocated in full. Amount allotted at highest yield as percentage of amount bid at that yield was 76.5%.

• The recent richening of the space suggests that stability will promote demand at today’s auction, even though outright yield levels will not be as enticing as they have been in recent times.
• However, the general flatness of the curve, the fact that we have 3 ACGB auctions this week and the Monday timing of this round of supply present potential headwinds for takedown.
• There isn’t much in the way of pure RV appeal when it comes to the line, which looks about fair vs. surrounding tenors on most metrics.
• Still, we expect fairly solid demand at today’s auction, keeping up the run of smooth passage when it comes to AOFM auctions.
• Results due at 0000GMT/1100AEDT.