AUCTION PREVIEW: Sep-25 I/L Supply Due

The Australian Office of Financial Management (AOFM) will today sell A$150mn of the 3.00% 20 September 2025 I/L Bond, issue #CAIN415. The line was last sold on 22 February 2022 for A$150mn. The sale drew an average yield of -1.1400%, at a high yield of -1.1300% and was covered 4.8667x. There were 48 bidders, 14 of which were successful and 12 were allocated in full. Amount allotted at highest yield as percentage of amount bid at that yield was 80.0%.

• Although RBA tightening expectations have pared back from the recent highs, the well-documented inflationary pressures and wider expectations for an uptick in CPI through year-end will likely underpin demand at today’s auction.
• Note that Australian breakeven metrics continue to operate around the upper end of their recently observed respective ranges, with 3-Year breakevens comfortably above the upper end of the RBA’s 2-3% target range at ~3.6%.
• Results due at 0200BST/1100AEST.