JGB futures tick to fresh session lows ahead...>

JGBS: JGB futures tick to fresh session lows ahead of the bell, last -29. The

contract softened at the Tokyo re-open, building on overnight weakness, although

moved off lows as local equities pulled back from early highs, before poorly

received 30-Year supply and a recovery from the lows in local equities added

fresh pressure.

- 7s continue to underperform in cash, with some weakness creeping into the long

end since mid-morning in pre-auction concession, building post-auction.

- As a reminder the auction saw the tail widen at the margin vs. prev., while

the cover ratio hit the lowest level seen at a 30-Year auction since 2016 and

the low price just about matched dealer exp. (per the BBG poll). It would seem

that there was some worry ahead re: increased JGB supply, as well as on the

recent optimism re: the global economic re-opening and the BoJ's desire for a

steeper yield curve.

- Elsewhere, the LCH/JSCC 20- & 30-Year swap spreads widened again, pointing to

continued paying from abroad in those tenors.

- 1-10 Year BoJ Rinban ops headline locally tomorrow.