September 27, 2022 03:46 GMT
Nothing in the way of immediate, meaningful reaction in super-long JGBs as the high yield witnessed at the latest round of 40-Year JGB supply matched wider expectations (as proxied by the BBG dealer poll).
- The cover ratio seen at the auction fell back towards the lows seen at March’s 40-Year auction.
- It would seem that ongoing market volatility and fear surrounding a potential continued sell off dominated any outright or relative value propositions, limiting demand, as we suggested may be the case ahead of the auction.
- Note that 40-Year JGBs don’t seem to have traded during the early rounds of the Tokyo afternoon session.