JGBs trade softer, with the 5-Year sector......>

JGBS: JGBs trade softer, with the 5-Year sector experiencing some modest

underperformance ahead of today's supply, super-long paper has also seen some

modest underperformance after the recent run of outperformance.

- There appears to be a mild degree of concern ahead of the auction owing to the

flatness of the 2-/5-Year yield differential, although the fact that the auction

represents the opening of a fresh JGB line should provide some support. The

sector also looks relatively unattractive, with the belly of the curve looking a

little rich.

- Futures also trade a touch softer, but have stuck to a tight range. Bulls look

to 151.02-19, where the 2018 & monthly highs are situated. Daily studies looking

to correct from modestly overbought levels and the lack of topside follow

through remain concerns for bulls. In saying that, bears still need a close

below 150.89 to signal a false break higher and return initial focus to

150.71-80.