AUCTION PREVIEW: Another Auction In The RBA Sweet Spot

The Australian Office of Financial Management (AOFM) will today sell A$1.5bn of the 0.25% 21 November 2025 Bond, issue #TB161. The line was last sold on 9 October 2020 for A$1.5bn. The sale drew an average yield of 0.3143%, at a high yield of 0.3175% and was covered 6.1867x. There were 49 bidders, 13 of which were successful and 6 were allocated in full. Amount allotted at highest yield as percentage of amount bid at that yield was 19.0%.

• Although there is a heavy slate of domestic and international risk evident in the coming week, expectations re: RBA easing, the limited DV01 on offer in today's auction and ample liquidity backdrop should provide more than enough demand to result in smooth passage at this auction.
• Recent formal inclusion into the inaugural 5-Yearbond futures basket should have no meaningful impact on this round of supply.
• We have discussed swap spread dynamics surrounding RBA easing & a lower AOFM run rate previously, with recent discussions surrounding those matters still holding true.
• Results due at 0000GMT/1100AEDT.