AUSSIE BONDS: May-30 Supply Goes Well, Strong Demand
The latest ACGB May-30 auction priced comfortably through mids, with a weighted average yield 1.16bps below prevailing mid levels, according to Yieldbroker data.
- Demand was solid, with a cover ratio of 4.3563x — strong by historical standards, though below the exceptionally high 4.7386x recorded at the previous auction.
- Given the current yield was around 30bps lower than at the last auction and 55–60bps below the November 2024 peak of 4.36%, today’s result is likely to be interpreted as robust.
- The bid was supported by a steepening of the 3s/10s yield curve by roughly 25bps since the previous sale. That said, the curve remains 30bps flatter than its April peak — the steepest level since late 2021.
- Also contributing to the supportive tone was the market's continued expectation of RBA rate cuts in 2025, though pricing has moderated slightly over the past month.
- The cash line is slightly cheaper in post-auction trading.
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BOJ: Rinban Purchase Offer
The BoJ offers to buy a total of Y925bn of JGBs from the market:
- Y275bn worth of JGBs with 1-3 Years until maturity
- Y275bn worth of JGBs with 3-5 Years until maturity
- Y300bn worth of JGBs with 5-10 Years until maturity
- Y75bn worth of JGBs with 25+ Years until maturity
AUSSIE BONDS: ACGB Dec-34 Auction Result
The AOFM sells A$1000mn of the 3.50% 21 December 2034 bond, issue #TB168:
- Average Yield (%): 4.2878 (prev. 4.4640)
- High Yield (%): 4.2900 (prev. 4.4640)
- Bid/Cover: 3.9900x (prev. 3.7250x)
- Allotted at Highest Accepted Yld as % of Bid at that Yld (%): 50 (prev. 96)
- Bidders: 38 (prev. 42), 17 (prev. 15) successful, 10 (prev. 7) allocated in full
FOREX: AUD Crosses - Some Pullback
The USD finally bounced overnight, causing the AUD to top out near its pivotal resistance of 0.6400 and consolidate after its longest rally in almost a year. US equities continued to bounce with risk stabilising, as Trump called on China to “reach out“ to start negotiations. The AUD will continue to be seen as a proxy to China so it is worth keeping an eye on how the PBOC intends to let this play out in the USD/CNH, as well as the extent of potential future stimulus.
- EUR/AUD - Overnight range 1.7717 - 1.7887, further consolidation as we approach a long weekend. Asia opens a little higher around 1.7850 as buyers have taken advantage of dips back to 1.7700 once more.
- GBP/AUD - Overnight range 2.0717 - 2.0867, GBP/AUD continues to consolidate having found demand once again back toward 2.06/07. Asia opens pretty well bid back a above 2.0900 as price breaks levels from overnight and the pair looks to form a base around 2.06/07 from which to again push higher.
- AUD/JPY - Overnight range 90.60 - 91.40, Asia opens soft and breaks the overnight lows. Some position paring coming into a long weekend, expect consolidation to continue.
- AUD/NZD - Overnight range 1.0727 - 1.0771, the cross is dealing in Asia around 1.0745 with very little direction. Resistance towards 1.0950/1.1000 should be tough first up, look for some consolidation after stale longs have been stopped out last week.
Fig 1: GBP/AUD Spot Hourly Chart
Source: MNI - Market News/Bloomberg
