AUCTION PREVIEW: ACGB Nov '24 Supply Due

The Australian Office of Financial Management (AOFM) will today sell A$1.0bn of the 0.25% 21 November 2024 Bond, issue #TB159. The line was last sold on 7 May 2021 for A$800mn. The sale drew an average yield of 0.2971%, at a high yield of 0.3000% and was covered 4.7875x. There were 44 bidders, 15 of which were successful and 7 were allocated in full. Amount allotted at highest yield as percentage of amount bid at that yield was 6.8%.

• The recent richening (the line last yields ~0.27%) may counter the impact of the limited DV01 that is on offer today, although there has been a slight retracement from multi-month richest levels in recent sessions.
• It is a hard one to weigh up given the lack of recent tender history, although record levels of excess liquidity in the domestic banking system, general RBA-purchase adjusted supply dynamics (excluding this week's net positive round of supply, the first such instance since April) and international relative value appeal should underpin demand, resulting in the smooth passage of the auction in the grander scheme of things.
• Results due at 0200BST/1100AEST.