AUCTION PREVIEW: ACGB Nov-28 Supply Due

The Australian Office of Financial Management (AOFM) will today sell A$800mn of the 2.75% 21 November 2028 Bond, issue #TB152. The line was last sold on 30 September 2022 for A$700mn. The sale drew an average yield of 3.7893%, at a high yield of 3.7925% and was covered 2.7429x. There were 41 bidders, 15 of which were successful and 9 were allocated in full. Amount allotted at highest yield as percentage of amount bid at that yield was 44.3%.

• The combination of the fact that this is the only AOFM ACGB tender of the week, the recent stepdown in the AOFM’s expected ACGB issuance task for the current FY, a more than palatable DV01 on offer (A$422K) and outright yield levels stabilising away from cycle cheaps should mean that the auction is smoothly digested.
• Elsewhere, the line looks a little rich on a butterfly structure vs. 2s and 10s, but that shouldn’t be overly prohibitive for demand at today’s auction.
• Expect smooth passage, with pricing comfortably through mids.
• Results due at 0100GMT/1100AEDT.