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Treasury Rally Resumes On Renewed Omicron Fears

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The latest round of political and COVID-related developments/chatter have provided little impetus for the JGB space early this week, with benchmark cash JGBs running little changed to 0.5bp cheaper across the curve, while some modest widening has been seen in longer-dated swap spreads. JGB futures hit the lunch break a little softer than their overnight closing levels, -8, after showing below the range witnessed at the back end of last week. A sustained break of Friday's post-Tokyo trade lows (151.90) would switch technical focus to the Jun 17 low (151.49). There has been little in the way of idiosyncratic news flow since the re-open, with participants looking ahead to tomorrow's 30-Year JGB supply.