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Looking Through 20-Year Auction

JGBS

The latest 20-Year JGB auction sees the low price miss wider dealer expectations (which stood at 99.50, per the BBG dealer poll), although the cover ratio ticked higher and the tail width moderated from that seen in September.

  • We remind you that last month’s auction was particularly weak, meaning that last month’s cover ratio (which was the lowest observed at a 20-Year auction since ’12) and particularly wide tail provide very low comparison bars.
  • This month’s cover ratio was pretty much bang in line with the 6-auction average, capped by ongoing market vol., but with the outright and relative value of 20s providing enough to generate a baseline level of demand.
  • JGB futures are a touch lower post-auction, while cash 20s are little changed, with both trading in a relatively contained, two-way manner in the immediate aftermath of the event.
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com

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