AUCTION PREVIEW: This Week's Lonely ACGB Offering

The Australian Office of Financial Management (AOFM) will today sell A2.0bn of the 2.75% 21 November 2029 Bond, issue #TB154. The line was last sold on 22 July 2020 for A$2.0bn. The sale drew an average yield of 0.8300%, at a high yield of 0.8300% and was covered 3.1225x. There were 42 bidders, 1 of which were successful and 1 were allocated in full. Amount allotted at highest yield as percentage of amount bid at that yield was 100%.

• The relatively limited (at least by recent standards) amount of coupon supply on offer this week (this is the only conventional ACGB auction), coupled with the choice to auction on a Monday, may point to the AOFM's desire to avoid futures roll activity, at least according to some desks.
• The line will be the shorted basket constituent in XMZ0.
• Friday's back up in yields and the relatively shallow amount of coupon supply should provide further fire to what was already expected to be a solid auction.
• ASWs edge back towards highs after last week's blip lower.
• We should flag that the most recent auction of the line saw 1 participant pay over 1.0bp through prevailing mids at the time of supply, as they took down all of the paper on offer.
• Results due at 0200BST/1100AEDT.