JGB futures finished the morning session at....>

JGBS: JGB futures finished the morning session at best levels/testing

yesterday's session highs, with the belly to longer end outperforming in cash

trade, and no signs of concession ahead of today's 20-Year supply. As a reminder

there was ~Y20tn worth of redemptions in the space today, which may have been

put to work.

- The low price of the auction was in line with dealer exp., with a solid enough

cover ratio on show, albeit a little softer than the previous auction. The tail

was 0.1bp wider than the previous auction.

- JGB futures are just off of their morning closing levels last, with the

super-long end of the cash curve unwinding its modest outperformance, likely on

the back of the back up in the cover ratio & slightly wider tail at today's

auction.

- The space had little reaction to Japanese PM Abe being re-elected leader of

the ruling LDP Party, as he won a comfortable majority.