AUSSIE BONDS: Solid Digestion Of Apr-37 Supply With More Demand

The latest ACGB April 2037 auction attracted strong demand, with the weighted average yield printing 0.50bps through prevailing mid-yields, according to Yieldbroker — continuing the recent trend of firm pricing across ACGB auctions.

• The cover ratio rose sharply to 4.6400x from 3.6688x at the previous auction, indicating stronger investor participation. This was further supported by a notable decrease in the number of successful bidders.
• As noted in our preview, the outright yield was around 5bps lower than at the prior auction and remained approximately 40bps below the November 2024 peak.
• Bidding strength came despite recent deterioration in sentiment toward longer-dated global bonds, as consistently strong US economic data has delayed expectations for Federal Reserve rate cuts.
• The 3s/10s yield curve was roughly 40bps steeper than at the last auction, though still about 20bps below its recent peak — potentially tempering demand for duration.
• In early post-auction trading, both XM futures and the bond line have richened by around 1bp.