JGB futures moved higher as risk assets took...>

JGBS: JGB futures moved higher as risk assets took a hit & the JPY appreciated

but finished the morning off of best levels as equities moved away from session

lows, closing the morning session at 150.73 (+6 ticks).

- The shorter end of the JGB curve continued to underperform following the

uptick in the offer to cover ratio in yesterday's 1-3 Year Rinban operations.

While 7-20 Year paper outperformed heading in to today's 20-Year supply.

- The latest international security flows data showed that foreigners bought a

net Y486.0bln in Japanese bonds in the latest week, while Japanese investors

bought a net Y1.0900tln in foreign bonds (showing a deviation from repatriation

based flows).

- In futures the 150.55 support remains key with bears needing a close below to

shift initial focus to 150.36 and overall focus back to 150.08-09 where 2018 and

Oct lows are noted. The Bollinger base (150.61) is the key concern for bears

with potential to limit follow through. Bulls now need a close above 150.78 to

shift focus back to 150.87-90. Overall above 151.19 is needed to target 151.51

2017 highs.