CNH: USD/CNY Fixing Firmer, Error Term Widens Again

• CHINA SETS YUAN CENTRAL PARITY AT 7.2066 WEDS VS 7.2038

The latest round of ACGB Nov-28 supply sees the weighted average yield print 0.74bps through prevailing mids (per Yieldbroker), extending the recent trend of firm pricing at ACGB auctions.

• Moreover, the cover ratio increased to 4.5550x from 4.1214x.
• The significantly lower outright yield did not appear to dampen demand.
• Bidding interest was likely underpinned by rising market expectations for RBA easing in 2025, the bond’s inclusion in the YM futures basket, and renewed haven demand.
• Following the auction, YM showed little reaction, with the Nov-28 bond holding steady around pre-auction levels in cash trading. 

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)