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Unwinds Adding to Bull Flattener


Curve Bull-Flattening Rally Extends

JGBS: JGB futures edged lower at the start of the session, lagging the move in
U.S. Tsys & Aussie paper, before the move faded, with the lead contract
finishing the morning session 5 pips higher than settlement, trading just shy of
Friday's overnight session close as USD/JPY trades virtually unchanged.
- Yields are unchanged to 0.7bp lower across the curve, as 10-Year yields
consolidate below the heavily watched 0.1% level, last 0.085%.
- The BoJ left the size of its 1-5 Year Rinban operations unchanged today. The
offer to cover ratios of the operations were as follows: 1-3 Year 2.43 (prev.
2.81) 3-5 Year 1.63 (prev. 3.71)
- As a reminder, the BoJ released is plan for Rinban operations for the month of
December on Friday. The plan saw the BoJ reduce the number of purchases of 10-to
25-Year & 25+ Year JGBs to 4 times each per month, from 5 previously. The
indicative ranges for purchase sizes was left unchanged across all maturities.
- Rinban operations, 10-Year supply and an address from BoJ Deputy Gov. Wakatabe
will garner attention through the remainder of the week.
MNI London Bureau | +44 0203-865-3809 |