JGB's head into the close sharply lower,.......>

JGBS: JGB's head into the close sharply lower, futures down 32 ticks at 150.87

in the JBZ7 contract, volume has now rolled into Z7, with today the last trading

day for U7.

- JGB's were on the back foot after broad risk on sentiment took hold of markets

yesterday, pushing stocks higher globally and seeing bonds sell off, which bled

through to the Asia-Pac session. The Nikkei 225 is up 240 points while USD/JPY

is last at 109.40 after hitting 107.50 last week. 

- The sell off in JGB's was accelerated by a weak 5-Year auction; the sale saw

the weakest bid/cover since May at 4.069, and had a lower than estimated low

price at 100.13. This sparked an acceleration of the sell off in cash bonds, the

futures sensitive 10-year sector sees yield rise to 0.033% - up 3.3bp on the

session after hitting -0.10% on Sept 4, currently on track for the biggest one

day rise in 2017.

- Moves are mixed across the curve, yields higher between 1.5bp and 3bp, the

10-Year sector leading the way. JGB's underperform swaps again, especially in

the short term sector, 2-Year ASW cheapening 0.6bp to L-16.7bp.