AUCTION PREVIEW: May ACGB '30 Supply Due

The Australian Office of Financial Management (AOFM) will today sell A$1.2tn of the 2.50% 21 May 2030 Bond, issue #TB155. The line was last sold on 31 August 2020 for A$2.0bn. The sale drew an average yield of 0.9794%, at a high yield of 0.9800% and was covered 6.0275x. There were 51 bidders, 15 of which were successful and 4 were allocated in full. Amount allotted at highest yield as percentage of amount bid at that yield was 91.1%.

• The turn of the Japanese fiscal year, the negative RBA adjusted net supply backdrop and record levels of excess liquidity in the domestic banking system should support demand at today's auction, as should the recent calming of the broader bond market.
• 10-Year swap spreads hover around the middle of the range witnessed since early October, presenting no headwinds on that front.
• Elsewhere, the relative steepness of the ACGB curve vs. most of its major global counterparts should also provide support.
• Results due at 0200BST/1100AEST.