Futures Back To Flat In Wake Of Soggy 5-Year Auction

The latest 5-Year auction was on the softer side, with the issues highlighted in our auction preview (namely a lack of pre-auction concession, little in the way of relative value and more desirable carry & roll propositions further out the curve) likely weighing on demand. The yield tail was steady and relatively narrow, although the cover ratio cratered back towards the levels seen at March's 5-Year auction. Elsewhere, the low and average prices that prevailed at auction missed broader dealer expectations for the low price, which stood at 100.51 per the BBG dealer poll. Little in the way of notable reaction, with futures back to unchanged on the day and 5s still outperforming in cash JGB trade, although the belly has moved away from richest levels.