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40-year Auction Delivers A Poor Result

JGBS AUCTION
BulletMarketsFixed Income BulletsHomepage

The issuance of 40-year bonds today encountered a tepid reception, with the actual high yield overshooting dealer expectations. The anticipated yield, as per the BBG poll, was projected at 2.26% versus the realised yield of 2.27%.

  • Adding to the lacklustre response, the cover ratio witnessed a decline, falling to 2.21x from 2.487x observed in the late March auction.
  • As highlighted in the auction preview, today's auction followed poor demand metrics at this month’s 30-year JGB auction.
  • Today’s result is likely to be deemed very poor considering it offered a substantially higher outright yield and steeper curve.
  • The 40-year bond is around 1bp cheaper in early afternoon trading, reflecting a negative response to the auction outcome.
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The issuance of 40-year bonds today encountered a tepid reception, with the actual high yield overshooting dealer expectations. The anticipated yield, as per the BBG poll, was projected at 2.26% versus the realised yield of 2.27%.

  • Adding to the lacklustre response, the cover ratio witnessed a decline, falling to 2.21x from 2.487x observed in the late March auction.
  • As highlighted in the auction preview, today's auction followed poor demand metrics at this month’s 30-year JGB auction.
  • Today’s result is likely to be deemed very poor considering it offered a substantially higher outright yield and steeper curve.
  • The 40-year bond is around 1bp cheaper in early afternoon trading, reflecting a negative response to the auction outcome.