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JGBS AUCTION: Strong 10Y Auction

JGBS AUCTION
GlobalBulletAPACFixed Income BulletsJapanRegionMarkets

The 10-year JGB auction saw the low price beat wider expectations (which stood at 100.22, per the BBG dealer poll). Moreover, the cover ratio rose to 3.529x from 3.17x at last month’s auction and the tail shortened to 0.02 from 0.09 in September.

  • The current 10-year auction took place with an outright yield of around 10bps lower than the September auction.
  • Moreover, the 2s/10s yield curve was approximately 5bps flatter than it was in September, nearing its flattest point since July 2023.
  • It was also noteworthy that the relative affordability of 10-year JGBs versus futures, as measured by the 7- to 10-year spread, was less attractive than in September, with the spread sitting around the middle of its range over the past year.
  • However, today’s auction did occur with sentiment towards global long-end bonds near the most favourable level this year.
  • In early Tokyo afternoon trading, the cash 10-year JGB is around 1bps richer, with JGB futures stronger and at session bests.
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The 10-year JGB auction saw the low price beat wider expectations (which stood at 100.22, per the BBG dealer poll). Moreover, the cover ratio rose to 3.529x from 3.17x at last month’s auction and the tail shortened to 0.02 from 0.09 in September.

  • The current 10-year auction took place with an outright yield of around 10bps lower than the September auction.
  • Moreover, the 2s/10s yield curve was approximately 5bps flatter than it was in September, nearing its flattest point since July 2023.
  • It was also noteworthy that the relative affordability of 10-year JGBs versus futures, as measured by the 7- to 10-year spread, was less attractive than in September, with the spread sitting around the middle of its range over the past year.
  • However, today’s auction did occur with sentiment towards global long-end bonds near the most favourable level this year.
  • In early Tokyo afternoon trading, the cash 10-year JGB is around 1bps richer, with JGB futures stronger and at session bests.