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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 27 August 2021 for A$1.0bn. The sale drew an average yield of 0.2599%, at a high yield of 0.2625% and was covered 4.7850x. There were 52 bidders, 20 of which were successful and 11 were allocated in full. Amount allotted at highest yield as percentage of amount bid at that yield was 25.6%.

  • The Q3 CPI print splits this week's AOFM supply and has the potential to provide some slight headwinds for demand. Nonetheless, the now familiar combination of record levels of liquidity in the domestic banking system, international relative appeal and the negative RBA-adjusted net supply dynamic should ultimately result in the smooth underwriting of the auction.
  • In terms of line specifics, the recent round of ACGB Apr-24 purchases to enforce the RBA's YCT mechanism has steepened the micro curve between the 2 lines back towards the recent wides, which should provide further interest at today's auction.
  • The ~A$300K DV01 on offer is more than digestible.
  • Results due at 0100BST/1100AEDT.