AUCTION PREVIEW: ACGB Nov-25 Supply Due

The Australian Office of Financial Management (AOFM) will today sell A$700mn of the 0.25% 21 November 2025 Bond, issue #TB161. The line was last sold on 2 September 2022 for A$500mn. The sale drew an average yield of 3.3210%, at a high yield of 3.3225% and was covered 3.7000x. There were 35 bidders, 12 of which were successful, and 5 were allocated in full. The amount allotted at the highest yield as a percentage of the amount bid at that yield was 94.3%.

• The digestible DV01 on offer (A$174K) and the benchmark 3-Year status of the line should be positives for demand, with the same holding true for the hedgability of the line via YM futures.
• The move away from cycle cheaps and shift lower in expected RBA tightening priced into markets post-RBA meeting should also benefit demand, although ongoing market volatility could limit the cover ratio.
• The line looks fair in micro-RV terms.
• The flatness of the wider curve is also noted and could be a positive for demand at the margin.
• Expect smooth digestion, with weighted average pricing comfortably through mids.
• Results are due at 0100BST/1100AEDT.