AUCTION PREVIEW: Nov-27 I/L Supply Due

The Australian Office of Financial Management (AOFM) will today sell A$150mn of the 0.75% 21 November 2027 Indexed Bond, issue #CAIN414. The line was last sold on 28 February 2023 for A$100mn. The sale drew an average yield of 0.9175%, at a high yield of 0.9200% and was covered 5.8500x. There were 47 bidders, 7 of which were successful and 5 were allocated in full. Amount allotted at the highest yield as a percentage of amount bid at that yield was 50.0%.

• The current inflationary environment should result in smooth enough takedown of today's auction, even after the RBA suggested that the inflation peak in Australia has been seen. That is despite worry surrounding the global banking sector and the threat of a general tightening in lending conditions, which would threaten to dent inflation.
• 5-Year breakevens have pulled back from YtD highs over the last month or so and now operate around the middle of the RBA’s 2-3% inflation target band, presenting a more attractive entry point for those worried about higher for longer inflation.
• Results due at 0100BST/1100AEDT.