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​Poor Demand Metrics For 20Y Auction​

JGBS AUCTION
Homepagemarkets-real-timeBulletMarketsFixed Income Bullets

20-year supply showed poor demand metrics, with the low price failing to meet dealer expectations (which stood at 103.00, per the BBG poll) and the auction tail lengthening. However, the cover ratio was steady at 3.4749x versus 3.4223x previously.

  • As highlighted in the auction preview, the current auction offered an outright yield and a 10/20 yield curve that were around the same levels as August’s outing. However, the 20-year JGB was richer relative to the 10/20/30 butterfly than at August’s auction.
  • Given that today's auction follows solid, though not exceptional, results from September's 10-year and 30-year JGB auctions, the result is likely deemed poor.
  • JGB futures have gapped lower after the lunch break, with the 20-year JGB ~1bp cheaper in post-auction trading.
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20-year supply showed poor demand metrics, with the low price failing to meet dealer expectations (which stood at 103.00, per the BBG poll) and the auction tail lengthening. However, the cover ratio was steady at 3.4749x versus 3.4223x previously.

  • As highlighted in the auction preview, the current auction offered an outright yield and a 10/20 yield curve that were around the same levels as August’s outing. However, the 20-year JGB was richer relative to the 10/20/30 butterfly than at August’s auction.
  • Given that today's auction follows solid, though not exceptional, results from September's 10-year and 30-year JGB auctions, the result is likely deemed poor.
  • JGB futures have gapped lower after the lunch break, with the 20-year JGB ~1bp cheaper in post-auction trading.