5-Year Supply Well Received

A solid round of 5-Year JGB supply sees the low price meet broader expectations (taken from the BBG dealer survey), while the tail width held steady when compared to the previous auction as the cover ratio moved higher, topping the 6-acution average (3.78x) as it hit the highest level witnessed at a 5-Year JGB auction since April. Value vs. futures and the ability to set relative value steepener plays ahead of the impending outline of the well-discussed fiscal support package (which may weigh on the super long end on an increased issuance burden) were the most likely supporting factors for takedown (outlined in our auction preview).