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Bear Steepening For Second Day

JGBS

After a modest look lower, perhaps on the previously alluded to fiscal and COVID headlines, in addition to Tokyo reaction to the cheapening witnessed in core global FI markets since Monday’s onshore close, JGB futures regained some poise, hitting the lunch bell -3 after a look below their overnight trough.

  • Yields are little changed out to 10s, but the moves beyond that point have been more notable with 1-3bp of cheapening as 40s lead the way lower, promoting bear steepening of the curve for the second consecutive session.
  • It seems that the domestic life insurer & pension fund investor cohort is on hiatus this week after signs of demand from that cohort became apparent in the super-long end last week.
  • This afternoon’s liquidity enhancement auction for off-the-run 5- to 15.5-Year JGBs provides the highlight of today’s domestic docket.
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com

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