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30-Year Digested Smoothly Enough

JGBS

The latest round of 30-Year JGB supply went smoothly enough, with the low price coming in above broader dealer expectations (BBG poll stood at 101.25), while the price tail held steady when compared to the previous auction as the cover ratio (3.245x) came in virtually in line with the six-auction average (3.239x). The previously alluded to lifer demand, stemming from a steep yield curve, market vol. and elevated FX-hedging costs likely allowed the low price to top wider expectations, while impaired market functioning (albeit off of extremes) and the same general market vol. likely prevented broader participation.

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