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Firm Pricing For ACGB May-28 Supply But Less Demand Seen


The latest round of ACGB May-28 supply sees the weighted average yield print 1.43bp through prevailing mids (per Yieldbroker), extending the recent trend of firm pricing at ACGB auctions.

  • An expectation of continued firm pricing at auctions proved correct, but the cover ratio at 3.6071x was materially weaker than the 5.7000x seen at the February 10 auction.
  • Uncertainty regarding the near-term outlook for RBA policy and the flatness of the 3/5 cash curve look to have capped overall demand. However, the recent outright cheapening in the line has provided some sort of offset for those concerns.
  • There has been no notable movement in YM or XM futures post-supply, while the May-28 bond is 1bp richer versus pre-auction levels in cash trade.

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