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EGB supply for W/C 21 June, 2021 (2/2)


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EGB supply for W/C 21 June, 2021 (1/2)

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The Australian Office of Financial Management (AOFM) will today sell A$800mn of the 0.25% 21 November 2024 Bond, issue #TB159. The line was last sold on 26 March 2021 for A$800mn. The sale drew an average yield of 0.2523%, at a high yield of 0.2525% and was covered 4.3312x. There were 45 bidders, 8 of which were successful and 1 were allocated in full. Amount allotted at highest yield as percentage of amount bid at that yield was 97.4%.

  • The chance that the RBA chooses not to extend it's 3-Year targeting mechanism to ACGB Nov '24 from ACGB Apr '24 at its July meeting (which is seemingly the consensus view, at least at present) presents a direct risk to takedown, but that will likely be seen as an issue for further down the line, given the notion that this idea should be at least partially in the price (we have covered the ACGB Apr '24/Nov '24 spread on multiple occasions in recent weeks/months). The backdrop of historically high excess liquidity among domestic banks, digestible DV01, the positive fiscal situation (which should be formalised in next week's Federal Budget) and the pickup vs. the ACGB Apr '24 should support demand, making for more than comfortable digestion.
  • Results due at 0200BST/1100AEST.