JGB futures went in to the lunchbreak 2........>

JGBS: JGB futures went in to the lunchbreak 2 ticks higher at 150.89, as they

operated in a tight range.

- The cash space saw 3-Year paper underperform, with the bulk of the curve

moving lower despite JPY strength & a soft AM session for the Nikkei 225.

- Looking to the BoJ's Rinban operations the offer to cover ratio dipped notably

in the 1-3 Year bucket, the ratio was relatively stable in the 3-Year bucket,

while the 5-10 Year bucket saw the offer to cover ratio jump to 3.72 from 2.71

at the prior operation covering the tenors.

- From a technical perspective the recovery from 200-DMA tests that defined last

week appears to be in trouble with follow through lacking above the 21-DMA

(150.89). Bulls now need a close above 150.97 to confirm focus on layers of

resistance 151.15-19. The 150.85 support is key today. Bears now need a close

below this level to return focus to 150.55-150.73 where key DMAs are clustered.

Below 150.55 is needed to target 150.36 and then 150.08-09 where 2018 and Oct

lows are noted.