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Nov-29 Supply Goes Smoothly But Less Demand

AUSSIE BONDS

The latest round of ACGB Nov-29 supply comes as expected pricing comfortably through mids (weighted average yield was 1.34bps through prevailing mids, per Yieldbroker).

  • Nevertheless, the cover ratio declined to 3.100x from 3.2286x prior.
  • As noted in the MNI Auction Preview, today's auction smooth absorption occurred despite several potentially negative factors, including the flatness of the curve, a relatively hawkish RBA, and the line's exclusion from the YM basket.
  • On the positive side, it was important to acknowledge that the sentiment towards global bonds had improved over the past month.
  • The Nov-29 line is around 0.5bp richer in cash post-auction trading.

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