AUSSIE BONDS: ACGB May-32 Supply Absorbed With Solid Demand

Repo rates remain stable and at the lower end of recent ranges and with a modest maturity schedule after today, it seems likely that this week could see muted injections for the remainder of the week.  

• The PBOC issued CNY0.5bn of 7-day reverse repo at 1.4% during this morning's operations.
• Today's maturities CNY0.5bn of 7-day reverse repo
• Net liquidity unchanged
• The PBOC monitors and maintains liquidity in the interbank system through the issuance of reverse repo.
• The CFETS Pledged Repo Deposit Institutions 7 Day Weighted is at 1.34%, from prior close of 1.32%.
• The China overnight interbank repo rate is at 1.21%, from the prior close of 1.20%.
• The China 7-day interbank repo rate is at 1.34%, from the prior close of 1.33%

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Expectations of sustained strong pricing at today's auction proved accurate, as the weighted average yield printed 0.91bps through prevailing mids, according to Yieldbroker. The cover ratio at 3.0700x printed around levels seen at recent longer-dated auctions.

• As highlighted in our preview, bidding at today’s auction was likely influenced by several factors. The outright yield sat around 20bps below its cycle high, but still some 55bps above last October’s low.
• The 3/10 yield curve was around ~10bps steeper than its recent low, the flattest since mid-2023.
• Investor sentiment toward longer-dated global bonds remained skittish amidst Middle East war headlines.
• In post-auction dealings, the ACGB Jun-51 cash trade is little changed.

• CHINA PBOC CONDUCTS CNY0.5 BLN VIA 7-DAY REVERSE REPO WEDS