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Bund put spread seller


The Australian Office of Financial Management (AOFM) will today sell A$2.0bn of the 1.0% 21 Dec 2030 Bond, issue #TB160. The line was last sold on 30 September 2020 for A$2.0bn. The sale drew an average yield of 0.8500%, at a high yield of 0.8500% and was covered 4.1525x. There were 52 bidders, 1 of which was successful and allocated in full. Amount allotted at highest yield as percentage of amount bid at that yield was 100%.

  • This is fairly rare tap of the line, although it does represent the closest pin to a true 10-Year on the ACGB curve, in addition to forming part of the XMZ0 bucket.
  • While recent bond auctions have generally been nothing short of stellar, the potential for a wider round of ACGB purchases from the RBA, perhaps with broader focus on the 5-10 Year zone of the cure, may eliminate some of the yield pickup and curve steepness that has made ACGB offerings so popular to foreign investors in recent times. However, we don't seem to be at that point yet, with the hedgeability of the offering aided by the aforementioned XMZ0 basket, potential for deeper RBA easing and ample liquidity backdrop set to add to the step down in weekly AOFM issuance and support takedown. ~A$4.4bn worth of ACGB coupons will be eligible for deployment at today's auction, given the 21 October payment date, that is if the holders haven't already put that back to work in the space.
  • Results due at 0100BST/1100AEDT.
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