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AUSSIE BONDS: ACGB May-34 Auction Goes Smoothly But Less Demand Present

AUSSIE BONDS
RegionGlobalBulletAPACFixed Income BulletsAustraliaMarkets

Expectations of sustained strong pricing at today's auction proved accurate, as the weighted average yield printed 0.30bps through prevailing mids, according to Yieldbroker. However, the cover ratio at 2.4580x was lower than the 2.5333x seen at the August auction.

  • As noted in our preview, bidding at today’s auction was likely shaped by several factors. The outright yield was 10-15bps lower than at the early August auction, 105bps below the November high, and near its lowest level in the past 12 months.
  • However, the 3/10 yield curve was about 10bps steeper compared to early August and close to its highest point this year.
  • Demand was also likely supported by the line’s inclusion in the XM basket and positive sentiment towards longer-dated global bonds.
  • The auction, however, occurred just ahead of today’s release of August CPI data.
  • In post-auction dealings, the ACGB May-34 cash trade is ~0.5bp cheaper, with XM slightly lower.
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Expectations of sustained strong pricing at today's auction proved accurate, as the weighted average yield printed 0.30bps through prevailing mids, according to Yieldbroker. However, the cover ratio at 2.4580x was lower than the 2.5333x seen at the August auction.

  • As noted in our preview, bidding at today’s auction was likely shaped by several factors. The outright yield was 10-15bps lower than at the early August auction, 105bps below the November high, and near its lowest level in the past 12 months.
  • However, the 3/10 yield curve was about 10bps steeper compared to early August and close to its highest point this year.
  • Demand was also likely supported by the line’s inclusion in the XM basket and positive sentiment towards longer-dated global bonds.
  • The auction, however, occurred just ahead of today’s release of August CPI data.
  • In post-auction dealings, the ACGB May-34 cash trade is ~0.5bp cheaper, with XM slightly lower.