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20-Year Supply Goes Well

JGBS

The low price at the latest 20-Year JGB auction comfortably tops wider expectations (which stood at 100.70, per the BBG dealer survey), while the cover ratio moves higher, above the 6-month average (which stands at 3.14x) and the price tail compressed notably. The recent cheapening in outright terms and on the 10-/20-/30-Year butterfly, in addition to some likely post-BoJ 20-/30-Year steepener interest, were probable sources of demand, as outlined in our auction preview. Ongoing market vol. and uncertainty re: BoJ policy probably capped the cover ratio a little, but this was a well-received auction. 20s firm post supply, in both outright terms and on the aforementioned fly structure.

MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com

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