AUCTION PREVIEW: Nov-32 Index-Linked Supply Due

The Australian Office of Financial Management (AOFM) will today sell A$150mn of 0.25% 21 November 2032 Indexed Bond, issue #CAIN416. The line was last sold on 27 September 2022 for A$100mn. The sale drew an average yield of 1.9705%, at a high yield of 1.9925% and was covered 3.1300x. There were 34 bidders, 4 of which were successful and 2 were allocated in full. Amount allotted at highest yield as percentage of amount bid at that yield was 80.0%.

• The short-term inflationary impulse should result in solid enough demand at today’s auction, facilitating smooth takedown of the supply, even with longer term breakevens pointing to market confidence in the RBA returning inflation to its target band. (10-Year breakevens last print at 2.36%, around the mid-point of the YtD range).
• Results due at 0000GMT/1100AEDT.