AUSSIE BONDS: ACGB Nov-29 Auction Result

The Australian Office of Financial Management (AOFM) sells A$1000mn of the 2.75% 21 November 2028, # TB152:

• Average Yield (%): 3.2952 (prev. 4.1189)
• High Yield (%):  3.3000 (prev. 4.120)
• Bid/Cover: 4.5550x (prev. 4.1214x)
• Allotted at highest accepted yld as a % of the bid at that yld (%): 50.3 (prev. 76.9)
• Bidders: 48 (prev. 33), successful 14 (prev. 7), allocated in full 11 (prev. 2)

The Australian Office of Financial Management (AOFM) will today sell A$1000mn of the 2.75% 21 November 2028, # TB152. The line was last sold on 22 November 2024 for A$700mn.

• Several factors could influence bidding at today’s auction. The bond’s outright yield has fallen dramatically over the past week as global equity markets reacted negatively to President Trump’s reciprocal tariff announcement late Wednesday last week. The outright yield now sits 85-90bps lower than the previous outing and ~100bp below the November 2024 peak.
• Market expectations for RBA easing in 2025 have also strengthened following the US tariff details. A 50bp rate cut in May is given a 70% probability, with a cumulative 128 bps of easing priced by year-end (based on an effective cash rate of 4.09%).
• The line’s inclusion in the YM basket is also likely a positive alongside haven demand.
• Overall, another round of well-received supply is expected.
• Results are due at 0200 BST / 1100 AEST.

The Australian Office of Financial Management (AOFM) will today sell A$1000mn of the 2.75% 21 November 2028, # TB152. The line was last sold on 22 November 2024 for A$700mn. The sale drew an average yield of 4.1189%, at a high yield of 4.120% and was covered 4.1214x. There were 33 bidders, 7 of which were successful and 2 were allocated in full.

• The previous round of Nov-28 supply saw the weighted average yield print 1.53bps through prevailing mids (per Yieldbroker), extending the recent trend of firm pricing at ACGB auctions. However, the cover ratio nudged lower to 4.1214x from 4.5214x. A higher outright yield and a 3/5 yield curve at its steepest since November 2023 appeared to work to support the bid.
• This week's ACGB supply will be larger than the recent average weekly issuance of $1500mn, with A$400mn of the 4.25% 21 June 2034 bond issued on Tuesday and A$600mn of the 2.75% 21 June 2035 bond to be issued on Friday.
• According to the Budget 2025-26 Issuance Program Update from the Australian Office of Financial Management (AOFM), total issuance of Treasury Bonds (including Green Treasury Bonds) in 2025-26 is expected to be around $150 billion. Issuance of Treasury Indexed Bonds by tender is expected to be between $2 billion and $3 billion (additional issuance by syndication may be considered).
• For 2024-25, issuance of Treasury Bonds has been revised to around $100 billion, including around $2 billion of Green Treasury Bonds. Treasury-Indexed Bond issuance will be around $3 billion.
• Results are due at 0200 BST / 1100 AEST.