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Solid Absorption of May-28 Supply But Less Demand Present

AUSSIE BONDS

The latest round of ACGB May-28 supply sees the weighted average yield print 0.8bps through prevailing mids (per Yieldbroker), extending the recent trend of firm pricing at ACGB auctions.

  • However, the cover ratio fell to 3.8286x from 4.0778x at the July auction. Notably, July’s auction cleared with extremely few successful bidders, indicating aggressive investor bids.
  • As highlighted in the preview, several factors had the potential to negatively impact bidding at today’s auction, including a significantly lower outright yield and a continued less-than-dovish stance by RBA.
  • There has been no notable movement in YM futures or the cash line in post-supply dealings.

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