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JGB futures ticked back from best levels in....>

JGBS: JGB futures ticked back from best levels in early afternoon trade on the
back of the latest round of trade war reports, although the move was minimal,
with the contract sitting a handful of pips shy of its intraday high at present.
- As a reminder, futures were bid from the off, with little in the way of
headline flow apparent, some are pointing to trend following accounts as the
driver. 10-Year JGB yields remain in negative territory. Super-long paper has
underperformed in the wake of yesterday's 5 Year auction & the BoJ leaving the
size its 5-10 Year Rinban operations unchanged today, as some look for the Bank
to trim the size of its 25+ Year Rinban ops after the recent trimming of 10-25
Year purchases. Today's operations saw the offer to cover ratio tick up to 3.10x
vs. a prior 2.49x. Japanese Q/Q GDP provided a marginal miss vs. broader exp.
(although it was in line with the MNI consensus). Looking at the breakdown, the
BoJ will be encouraged by stronger than expected business spending data,
although net exports provided a drag on GDP, as worries around the global trade
backdrop/economic environment intensify.
- Focus tomorrow moves to 10-Year JGBi supply.
MNI London Bureau | +44 0203-865-3809 |
MNI London Bureau | +44 0203-865-3809 |

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