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Futures operated in a tight range and..........>

JGBS
JGBS: Futures operated in a tight range and finished 3 ticks higher at 150.90.
- The 5-20 Year sector of the curve outperformed, as the BoJ's 5-25+ Year Rinban
operations passed smoothly, with the offer to cover ratio stable in the 10 Year+
buckets, while the 5-10 Year bucket's offer to cover ratio reverted, after the
move higher in the operations conducted earlier this week.
- 3-Month cross currency JPY basis has tightened, pointing to repatriation flows
ahead of FY end.
- For JGB futures the recovery from 200-DMA tests that defined last week is
struggling with follow through lacking above the 21-DMA. Bulls need a close
above 150.97 to confirm focus on layers of resistance 151.15-19. The contract is
looking a little heavy with the 21-DMA capping and hints at a correction
initially targeting 150.62-73 where key DMAs are clustered. Below 150.55 is
needed to target 150.36 and then 150.08-09 where 2018 and Oct lows are noted.
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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