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 4 June 2021 for A$1.0bn. The sale drew an average yield of 0.6191%, at a high yield of 0.6225% and was covered 3.5250x. There were 48 bidders, 22 of which were successful and 14 were allocated in full. Amount allotted at highest yield as percentage of amount bid at that yield was 31.5%.

• This auction faces the crosswinds from the potential hawkish developments at next week's RBA decision and COVID-related lockdowns evident in Australia at present, most prominently in Sydney.
• Still, the latter factor, coupled with the recent history of AOFM tenders, the RBA's continued presence in the market and record amounts of excess liquidity sloshing around in the domestic banking system owing to the RBA's deployment of 'unconventional' monetary tools should mean that the auction passes without any real issue, even ahead of the AOFM's "detailed guidance on issuance plans" for FY21/22, which will be released later today.
• In terms of outright valuation, the line has edged away from recent cheaps, although this doesn't seem to present much of a hurdle re: takedown.
• Results due at 0200BST/1100AEST.