AUCTION PREVIEW: ACGB Nov '24 Supply, All About The Rolldown

The Australian Office of Financial Management (AOFM) will today sell A$2.0bn of the 0.25% 21 November 2024 Bond, issue #TB159. The line was last sold on 21 August 2020 for A$2.0bn. The sale drew an average yield of 0.3518%, at a high yield of 0.3525% and was covered 5.7625x. There were 39 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 50.4%.

• The rolldown towards the RBA's 3-Year yield target {~0.25%) is expected to be the driving force behind demand at this particular auction, given the recent convergence of ACGB April '24 as it rolls towards the 3-Year pin. The outright yield level of this particular line, last ~0.31%, should prove to be sufficiently enticing in this respect, which should in turn underscore demand, whether it be in outright terms or to leg into spread structures.
• Results due at 0200BST/1100AEST.