JGB futures provided a limited morning.........>

JGBS: JGB futures provided a limited morning session.

- Worth noting that the Japanese government left its view of the overall economy

unchanged in its latest monthly report, however, it downgraded it view on

exports.

- Focus remains on 40-Year supply, due later today, with little sign of

concession in the long end, as the curve trades modestly flatter. 40-Year

benchmark JGB yields have operated in a ~26bp range in the time since the most

recent auction, with market volatility driving investors into safe havens around

the new year period, although risk assets have regained some poise in the time

since. Yields last trade just off the recent cycle low at 0.736%, with demand

for super-long Japanese paper continuing. FY-end "window dressing" may begin to

creep into the JGB space, and may spur demand at today's auction, with the next

round of 40-Year supply not due until March 26.

- A soft start for the Nikkei 225, last -1.0%, has weighed on the JPY crosses,

as has a WSJ report re: differences remaining between China & the U.S. ahead of

this week's top level trade talks.