AUCTION PREVIEW: Nov-32 I/L Auction Due

The Australian Office of Financial Management (AOFM) will today sell A$150mn of the 0.25% 21 November 2032 I/L Bond, issue #CAIN416.

• This is the first tap of the line after the initial round of issuance via syndication back in August.
• Like major global counterparts, Australian breakevens hover just shy of their recent highs, with plenty of desks pointing to clients building upside inflation protection into their portfolio in recent weeks. There isn't any real worry re: inflation getting of control in Australia, even with the RBA seemingly willing to run inflation on the hotter side of its inflation target band before moving rates (with a focus on the need for wage growth to generate sustainable inflation over the medium term). This may suggest that any further widening in breakevens will be a little slower than what we have witnessed in recent times.
• Results due at 0000GMT/1100AEDT.