AUSSIE BONDS: ACGB Nov-29 Auction Result

US stocks continue to find demand for now on dips, the S&P looks to be turning its attention back to the all time highs. This would be very frustrating for the JPY Bulls as the JPY starts to come under pressure as a result in the crosses.

• EUR/JPY - Overnight range 164.63 - 165.64, Asia is trading around 165.50. EUR/JPY is now making new highs for the year. If this move can find some momentum it could signal the potential for this move to extend higher and begin an uptrend.
• GBP/JPY - Overnight range 194.79 - 195.86, Asia trades around 195.55. GBP/JPY failed again around the multiple tops just above 196.00. Some poor UK data capped this move overnight, a sustained break above here and the focus will turn to the 200 area.
• NZD/JPY - Overnight range 87.22 - 87.69, Asia is currently dealing 87.65. The pair is trying to break above some important resistance. A sustained move back above 88.00 would turn the focus back to the 90.00 area.

• CNH/JPY - Overnight range 20.0941 - 20.1723, Asia is currently trading around 20.1550. CNY/JPY has not bounced as much as the others, a sustained break above the 20.60 area would get JPY longs worried. 

  Fig 1 : GBP/JPY Hourly Chart

  

  Source: MNI - Market News/Bloomberg Finance L.P

The AOFM sells A$1000mn of the 1.75% 21 November 2032 Treasury Bond, #TB165:

• Average Yield (%): 4.0080 (prev. 4.1959)
• High Yield (%): 4.0100 (prev. 4.1975)
• Bid/Cover:  3.2100x (prev. 3.4786x)
• Allotted at Highest Accepted Yld as % of Bid (%): 71.6 (prev. 42.4)
• Bidders: 37 (prev. 32), successful 13 (prev. 10), allocated in full 6 (prev. 4)

The Australian Office of Financial Management (AOFM) will today sell A$1000mn of 1.75% 21 November 2032 bond. The line was last sold on February 28 for A$700mn. Several other factors could influence the bidding at today’s auction. 

• First, the outright yield is 20bps lower than at the time of the previous auction, and roughly 60bps below the November 2024 peak.
• Secondly, the 3/10 yield curve is around 35bps steeper than at the time of the previous auction but sits around 20bps below its recent high.
• On the positive side, mid-curve ACGBs have been supported by expectations of further RBA easing. A 25bp rate cut in July is given a 79% probability, with a cumulative 73bps of easing priced by year-end (based on an effective cash rate of 3.84%).
• Despite the mixed signals, today’s auction is expected to offer further insights into demand dynamics for ACGBs amid evolving market expectations.
• Results are due at 0200 BST / 1100 AEST.