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SWEDEN: Short-dated SGB Issue Could Serve As Litmus Test For Broader Demand

SWEDEN
CEEMEASwedenBulletGlobalFixed Income BulletsRegionMarkets

Today’s nominal SGB auction saw the first sub-5-year maturity sale since November 2023. The results were solid, with the 1.00% Nov-26 SGB (line 1059) attracting a 3.93x bid-to-cover ratio for the SEK3.75bln issued and a low price in excess of the pre-auction mid price. This was the highest nominal SGB bid-to-cover ratio since April (excluding the 4.22 ratio seen at today’s SEK250mln sale of the 0.50% Nov-45 SGB). 

  • The National Debt Office’s choice to issue the shorter-dated bond at today’s auction may have in part been influenced by the weak results seen through the summer.
  • The June/August auctions all featured the on-the-run 10-year 2.25% May-35 SGB, which attracted very low bid-to-cover ratios (see image).
  • The 1059 line auction may have served as a general litmus test of Swedish bond demand for the NDO, now that the summer period (usually associated with low volumes and liquidity) has passed.
  • The SEK3.75bln issued of the 1059 line accounts for the full planned issuance volume for that bond between May and November 2024 (as set out in the NDO’s borrowing report in May). 
  • The next nominal bond auction will be held on September 25, with details of the bonds on offer announced the week prior.

 

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Today’s nominal SGB auction saw the first sub-5-year maturity sale since November 2023. The results were solid, with the 1.00% Nov-26 SGB (line 1059) attracting a 3.93x bid-to-cover ratio for the SEK3.75bln issued and a low price in excess of the pre-auction mid price. This was the highest nominal SGB bid-to-cover ratio since April (excluding the 4.22 ratio seen at today’s SEK250mln sale of the 0.50% Nov-45 SGB). 

  • The National Debt Office’s choice to issue the shorter-dated bond at today’s auction may have in part been influenced by the weak results seen through the summer.
  • The June/August auctions all featured the on-the-run 10-year 2.25% May-35 SGB, which attracted very low bid-to-cover ratios (see image).
  • The 1059 line auction may have served as a general litmus test of Swedish bond demand for the NDO, now that the summer period (usually associated with low volumes and liquidity) has passed.
  • The SEK3.75bln issued of the 1059 line accounts for the full planned issuance volume for that bond between May and November 2024 (as set out in the NDO’s borrowing report in May). 
  • The next nominal bond auction will be held on September 25, with details of the bonds on offer announced the week prior.