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Smooth Digestion Of May-41 Supply With Stronger Demand

AUSSIE BONDS

The latest round of ACGB May-41 supply sees the weighted average yield print 0.62bps through prevailing mids (per Yieldbroker), extending the recent trend of firm pricing at ACGB auctions.

  • The cover ratio was also higher at 3.300x versus 2.100x at the August 2023 auction.
  • Despite waning positive sentiment towards longer-dated global bonds, today’s bid appears to have been supported by a higher outright yield and a steeper yield curve.
  • A sanguine view towards the RBA's policy outlook, after the removal of the explicit tightening bias in March, also likely influenced the level of demand. RBA-dated OIS is currently pricing 34bps of easing by year-end.
  • There has been a slight cheapening in XM futures and the bond line in early post-supply dealings.
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The latest round of ACGB May-41 supply sees the weighted average yield print 0.62bps through prevailing mids (per Yieldbroker), extending the recent trend of firm pricing at ACGB auctions.

  • The cover ratio was also higher at 3.300x versus 2.100x at the August 2023 auction.
  • Despite waning positive sentiment towards longer-dated global bonds, today’s bid appears to have been supported by a higher outright yield and a steeper yield curve.
  • A sanguine view towards the RBA's policy outlook, after the removal of the explicit tightening bias in March, also likely influenced the level of demand. RBA-dated OIS is currently pricing 34bps of easing by year-end.
  • There has been a slight cheapening in XM futures and the bond line in early post-supply dealings.