AUCTION PREVIEW: ACGB Nov-25 Supply Due

The Australian Office of Financial Management (AOFM) will today sell A$500mn of the 0.25% 21 November 2025 Bond, issue #TB161. The line was last sold on 9 December 2022 for A$700mn. The sale drew an average yield of 3.0450%, at a high yield of 3.0450% and was covered 4.9729x. There were 51 bidders, 1 of which was successful and 1 was allocated in full. Amount allotted at the highest yield as a percentage of amount bid at that yield was 100.0%.

• The recent richening shouldn’t provide much in the way of meaningful roadblocks when it comes to demand, with speculation surrounding an RBA pause and potential end to the tightening cycle growing, while the worry surrounding the global banking sphere remains evident (despite moderating).
• The flatness of the broader curve, hedgability of the line via YM futures (it is the shortest YM basket constituent) and elevated borrowing of the line via the RBA’s SLF (A$1.714bn at the last count, the bond most in demand via that facility) all bode well for demand.
• The likely relative lack of future supply will also be a positive for demand, particularly given the above factors.
• Expect solid demand at a minimum, with pricing comfortably through mids.
• Results due at 0100BST/1100AEDT.