Firm Pricing For ACGB Sep-26 Supply

The latest round of ACGB Sep-26 supply sees the weighted average yield print 1.76bps through prevailing mids (per Yieldbroker), extending the recent trend of firm pricing at ACGB auctions.

• While our anticipation of sustained strong pricing at auctions held true, it's noteworthy that the cover ratio saw a noticeable decline to 4.0312x, down from the previous 5.24x. It's essential to recognise, however, that market conditions now differ from those in early March.
• The attainment of cycle yield highs for this particular bond line appears to have provided some sort of offset for uncertainty around the RBA policy outlook stemming from this week's CPI data release. Moreover, the line's hedgability, thanks to its inclusion in the YM futures basket, and its status as a 3-year benchmark, looks to have contributed positively to demand.
• Nonetheless, the more than 50bp steepening of the yield curve since mid-June may have exerted some constraints on today's bidding.
• Following the supply, there has been a modest weakening observed in YM futures. It's possible that the slight cheapening in US tsys during the Asia-Pacific session may have played a role in this move. The April 2026 bond is trading 0.5bp cheaper compared to pre-auction levels.