AUCTION PREVIEW: Sep '30 Index Supply Due

The Australian Office of Financial Management (AOFM) will today sell A$150n of the 2.50% 20 September 2030 I/L Bond, issue #CAIN408. The line was last sold on 8 June 2021 for A$150mn. The sale drew an average yield of -0.6452%, at a high yield of 0.6400% and was covered 3.6067x. There were 42 bidders, 7 of which were successful and 4 were allocated in full. Amount allotted at highest yield as percentage of amount bid at that yield was 60.8%.

• Much like U.S. breakevens, Australian BEIs are back from their recent (multi-year) wides, with questions surrounding the longer-term inflationary impetus in the wake of the recent hawkish developments at the respective central banks setting in after a solid rally from last year's tights.
• Westpac believe "the recent narrowing in BEIs will slow from here. On a medium-term outright basis real yields remain expensive."
• Results due at 0200BST/1100AEST.