Bland 5-Year Auction

A run-of-the-mill round of 5-Year JGB supply. The lack of relative value appeal on the curve, with the aforementioned flatness & richness vs. shorter dated & belly peer JGBs, weighed on the cover ratio. That metric moved away from November’s multi-month high for a 5-Year auction and printed below the 6-auction average (3.98x). We also note that 5s do not provide anything like a comparable carry and roll proposition when looking to longer dated paper, which would disincentivise those looking to enter the long leg of a steepener play at this auction. The tail remained very tight, with the low price just about topping wider expectations (the BBG dealer poll looked for a low price of 100.42). Nothing in the way of notable market reaction, with cash 5s and futures incrementally richer vs. pre-auction levels.