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Needle Still Points North


Bearish Correction Still In Play

JGBS: JGBs drew support from a bout of risk aversion on the lack of notable
headway made at the latest round of U.S.-China trade talks (as expressed in
MOFCOM's communique), with a degree of by the rumour sell the fact creeping in.
A subsequent move lower in JPY crosses and the Nikkei 225 added further support
to the space.
- JGB futures breached yesterday's opening high, before closing the AM session
shy of best levels, while shorter dated paper through to the belly outperformed
in cash trade, ahead of today's 30-Year supply. 30-Year JGB yields edged lower
in the wake of the auction as the cover ratio edged higher & the tail narrowed
vs. the prior auction. Also worth noting that the low price topped the exp. of
the BBG dealer poll. This continued through the afternoon, with the curve
flattening as a result, while futures stuck to a tight range.
- Little reaction to comments from BoJ Gov. Kuroda, as he made no major
alterations to his assessment of the economy. The market also paid little
attention to the BoJ upgrading its assessment of 2 regions in its latest report.
MNI London Bureau | +44 0203-865-3809 |