Uptick In Size On Offer Weighs On Cover In ACGB Jun-51 Auction

The latest round of ACGB Jun-51 supply sees a soft cover ratio, with that metric comfortably below the 2.00x mark, although the fall in the cover ratio is largely the result of a doubling of the amount of paper on offer vs. the previous auction (total bids were seen at A$932mn vs. A$767mn at the prior auction of the line).

• Remember that we suggested that the AOFM may have unearthed some dealer demand via its liaison scheme to trigger the upsizing of supply (or it could have been looking to boost liquidity in the line).
• Pricing was still firm, with the weighted average yield printing 0.72bp through prevailing mids (per Yieldbroker).
• No immediate, meaningful reaction in XM futures nor in ACGB Jun-51 post-supply, with the yield of the line sitting ~0.8bp above prevailing mids observed ahead of auction at typing.