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 6 August 2021 for A$700mn. The sale drew an average yield of 0.4965%, at a high yield of 0.4975% and was covered 5.9714x. There were 46 bidders, 12 of which were successful and 4 were allocated in full. Amount allotted at highest yield as percentage of amount bid at that yield was 73.3%.

• The carry and roll observed and recent cheapening may offer a decent entry point for those that are of a more dovish disposition than the broader market pricing re: the RBA.
• Auction pricing should be firm enough, supported by the record levels of excess liquidity observed in the domestic banking system, international relative value appeal and the RBA purchase-adjusted negative net supply dynamic.
• The cover ratio will be worth watching, given the relative uptick in issuance size vs. the previous auction of the line, coupled with the gap in issuance (~3 months).
• Results due at 0000GMT/1100AEDT.