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A sense of calm has returned to the JGB........>

JGBS: A sense of calm has returned to the JGB market, with yields edging lower
after yesterday's BOJ sources inspired rout, with no real concession observed
ahead of today's 40-Year supply (outside of that observed yesterday), despite
some concerns surrounding demand at the upcoming auction.
- The worries were somewhat overdone, despite a lower than previous cover ratio
at 3.302 vs. 3.923, the latest JGB auction provided a lower than expected high
yield at 0.8800% vs. 0.8950%, which put a fresh, albeit modest, bid into JGB
futures and the super-long end of the curve, before sellers came to the fore,
leaving the 5-/40-Year JGB spread 2.3bp steeper last.
- From a technical perspective bulls look to the 200-DMA (150.74) which capped
Monday's rally. Support is noted at yesterday's low, the Feb 01 high (150.36)
MNI London Bureau | +44 0203-865-3809 |
MNI London Bureau | +44 0203-865-3809 |

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