Overall a very quiet session for JGB's. The....>

JGBS: Overall a very quiet session for JGB's. The drivers of the limited price

action were not domestic, JGB's instead took their lead from a risk off tone and

rise in UST's after German coalition talks failed and tax bill wrangling

continues in the US.

- JGB futures initially jumped at the open on risk off flows while the drop in

Japanese stocks at the open accelerated this move. After initially rising to

151.03 on the open JGB futures quickly plunged to session lows of 150.90 as

traders quickly took profit. Futures then settled into a 150.94/98 range to head

into the close at 150.96.

- Comments from Japan PM Abe did little to influence markets, Abe said that QQE

was working to ease the deflationary mindset and that BoJ policy was

appropriate.

- The JGB futures roll looks set to come into focus this week and next, the

Z7/H8 spread has been widening due to the scarcity of JGB #336 (the 10-Year

future CTD).

- Yields mixed across the curve, 10-Year yield last up 0.4bp at 0.038%.