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Smooth Digestion Of Apr-37 Supply But Less Demand


The latest round of ACGB Apr-37 supply sees the weighted average yield print 0.67bps through prevailing mids (per Yieldbroker), extending the recent trend of firm pricing at ACGB auctions.

  • The cover ratio was however lower at 2.7875x versus 2.9143x at the December auction.
  • While today’s auction saw a smooth digestion of supply, the less enthusiastic bid likely reflected a lower outright yield, the RBA’s retention of its tightening bias and the recent waning of the positive sentiment towards longer-dated bonds globally.
  • The other possible negative factor flagged in our auction preview, namely the line not being part of the XM basket, could also have constrained the overall strength of bidding.
  • There has been a slight cheapening in XM futures and the bond line in early post-supply dealings.

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