Smooth Digestion Of Dec-34 Supply

The first round of ACGB Dec-34 supply, following its syndicated opening on April 19, exhibited a weighted average yield of 0.73bp through prevailing mids, as reported by Yieldbroker. This outcome aligns with the recent trend of robust pricing observed at ACGB auctions.

• The cover ratio of 3.6250x was consistent with the 3.6643x recorded during the May 17 auction of the Jun-35 bond. Notably, the cover ratio at the May 17 auction significantly surpassed that of the April 5 auction, potentially indicating the impact of the then impending syndication of the new ACGB Dec-34 line.
• Expectations of sustained strong pricing at auctions proved accurate, as the possible negative factors mentioned in our auction preview did not significantly hamper the overall strength of bidding.
• Following the supply, there has been no significant movement observed in XM futures (ACGB Dec-34 is not included in the underlying basket for the contract). Additionally, the bond itself experienced minimal changes compared to pre-auction levels in cash trade.