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It would seem as if the dovish decision.......>

BONDS: It would seem as if the dovish decision from the RBNZ has spilled into
the broader Bond markets, dragging Aussie Bonds & subsequently U.S. Tsys higher.
The belly of the cash Tsys curve has experienced some modest outperformance with
30-Year supply out of the U.S. due later today, as well as comments from Fed
non-voter Evans & U.S. CPI.
- JGBs have been a little less reactive to the broader market theme, with
futures easing a touch, and the long end of the curve experiencing some modest
outperformance. Today's 30-Year JGB auction could have knock on effects for
global bonds. In outright terms, the benchmark 30-Year yield has operated in a
~20bp range in the time since the most recent auction, touching the highest
level seen since October of last year, of course inspired by the tweaks to the
BOJ's YCC. While the headline yields seem attractive, the auction will be a test
of super-long demand against the backdrop of the BoJ-induced volatility. The
volatility has seemingly discouraged Japanese life insurers from entering the
market, with a focus on where 10-Year yields will settle. 0.8% is usually viewed
as a threshold in the tenor, whereby life-insurers typically become more active.
MNI London Bureau | +44 0203-865-3809 |
MNI London Bureau | +44 0203-865-3809 |

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