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AUCTION PREVIEW: The Australian........>

AUSSIE BONDS: AUCTION PREVIEW: The Australian Office of Financial Management
(AOFM) will today sell A$1.2bn of the 1.50% 21 Jun 2031 Bond, issue #TB157. The
line was last sold on 4 September 2019 for A$800mn. The sale drew an average
yield of 0.9640%, at a high yield of 0.9650% and was covered 4.0888x. There were
43 bidders, 16 of which were successful and 6 were allocated in full. Amount
allotted at highest yield as percentage of amount bid at that yield was 86.1%.
- The larger than usual size of today's tender is probably a result of the (now
completed) futures roll and forms the only round of ACGB issuance this week,
which may aid takedown, despite the large size of singular line issuance. The
supply maintains the AOFM's focus on the 9-12 Year sector of the curve.
- The recent backup in yields from cycle lows (last 1.1655%, ~23bp back from
recent lows), coupled with the prospect of further RBA easing and increased
geopolitical risk, may help takedown. Although, it is worth cautioning that the
line looks a rich vs. the surrounding lines on a cash flow basis, and is also
pretty rich in term (but not vs. ACGB April '33 on a term basis).
- Results due at 0200BST/1100AEST.
MNI London Bureau | +44 0203-865-3809 |
MNI London Bureau | +44 0203-865-3809 |

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