Barclays writes "next week could see JGBs......>

JGBS: Barclays writes "next week could see JGBs continue to fluctuate with

overseas mkts. Barring a reversal of the oil price slide & risk-off flows, JGB

yields will likely remain under downward pressure. With 10y yields returning to

~10bp, we believe the curve could tend to come under bull-flattening pressure,

led by the superlong sector. In terms of supply & demand, Tuesday's 20y auction

will be the main focus in the week ahead. The BoJ will refrain from conducting

buying operations the day after auctions in November, but there should still be

a certain level of demand in the 20y sector, with the rise in US long-term

yields taking a breather amid general risk-off dynamics after the US midterm

elections. However, given our outlook for the BoJ's stealth normalization to

continue through next summer, the loss in the relative attractiveness of 20y

carry-and-rolldown since the introduction of YCC & the likely increase in demand

for 30y JGBs by investors focused on absolute yields, such as life insurers, due

to an improvement in carry relative to FX-hedged foreign bond yields, we believe

the 20y area of the superlong end will be vulnerable and retain our

"10y/20y/30y/ fly short (selling the body)" reco as a med-term core position."