AUCTION PREVIEW: ACGB Nov ’25 Supply Due

The Australian Office of Financial Management (AOFM) will today sell A$1.0bn of the 0.25% 21 November 2025 Bond, issue #TB161. The line was last sold on 9 April 2021 for A$800mn. The sale drew an average yield of 0.5614%, at a high yield of 0.5625% and was covered 4.1750x. There were 50 bidders, 12 of which were successful and 6 were allocated in full. Amount allotted at highest yield as percentage of amount bid at that yield was 66.9%.

• Auctions in the belly of the curve haven't shown much sensitivity to the proximity to the RBA's key July decision, yet, although that could change given the heightened speculation surrounding the future of the RBA's broader bond purchasing programme and 3-Year yield targeting scheme in the wake of Tuesday's RBA decision.
• The belly of the curve may be particularly susceptible to any tapering of the Bank's bond purchases, and, to a lesser extent, a decision to not extend the yield targeting scheme to ACGB Nov '24 (which is the consensus view at present, albeit perhaps not fully priced).
• The line's outright yield sits comfortably within the recent range.
• Swap spreads have consolidated in recent weeks, and sit a little off of their Mar wides, but are still comfortably wider than levels witnessed towards the tail end of '20.
• A reminder that longer dated auctions have not fared particularly well over the past couple of weeks, at least in bid/cover terms and by recent standards.
• Results due at 0200BST/1100AEST.