Free Trial
USDCAD TECHS

Remains Vulnerable

AUDUSD TECHS

Trend Needle Points North

US TSYS

Bonds Near Highs, Yield Curves Flatter

EURJPY TECHS

Bearish Outlook

Real-time Actionable Insight

Get the latest on Central Bank Policy and FX & FI Markets to help inform both your strategic and tactical decision-making.

Free Access

PREVIEW: 20-Year Supply Due

JGBS

The Japanese MOF will today sell Y1.2tn of 20-Year JGBs re-opening JB#180. The MOF last sold 20-Year debt on May 20, the auction drew cover of 3.765x at an average yield of 0.757%, average price of 100.74, high yield of 0.759%, low price of 100.70, with 68.5886% of bids allotted at the high yield.

  • The well-documented breakdown in market functioning amid a challenge of the BoJ’s resolve when it comes to the enforcement of the upper end of its permitted 10-Year JGB yield trading band presents the obvious headwind when it comes to today’s auction, even with 20-Year JGB yields hovering just shy of the recently minted cycle highs and apparent cheapness evident on the likes of the 10-/20-/30-Year butterfly structure. The well-documented basis issues hamper the hedging ability of futures, while the potential for further tests of the BoJ’s resolve provides further issues. This also provides some counter to the carry argument, with 20s currently providing the most attractive carry and roll proposition on the curve.
  • Note that there is the potential for domestic life insurers to provide at least some counter to these negatives given their previously outlined semi-annual investment intentions, although most desks remain cautious ahead of supply.
  • Short covering demand may provide some offset to the previously alluded to headwinds.
  • Also note that some desks have indicated the attractiveness of long ASW positions.
  • Results due at 0435BST/1235JST.
231 words

To read the full story

Why Subscribe to

MarketNews.com

MNI is the leading provider

of news and intelligence specifically for the Global Foreign Exchange and Fixed Income Markets, providing timely, relevant, and critical insight for market professionals and those who want to make informed investment decisions. We offer not simply news, but news analysis, linking breaking news to the effects on capital markets. Our exclusive information and intelligence moves markets.

Our credibility

for delivering mission-critical information has been built over three decades. The quality and experience of MNI's team of analysts and reporters across America, Asia and Europe truly sets us apart. Our Markets team includes former fixed-income specialists, currency traders, economists and strategists, who are able to combine expertise on macro economics, financial markets, and political risk to give a comprehensive and holistic insight on global markets.

The Japanese MOF will today sell Y1.2tn of 20-Year JGBs re-opening JB#180. The MOF last sold 20-Year debt on May 20, the auction drew cover of 3.765x at an average yield of 0.757%, average price of 100.74, high yield of 0.759%, low price of 100.70, with 68.5886% of bids allotted at the high yield.

  • The well-documented breakdown in market functioning amid a challenge of the BoJ’s resolve when it comes to the enforcement of the upper end of its permitted 10-Year JGB yield trading band presents the obvious headwind when it comes to today’s auction, even with 20-Year JGB yields hovering just shy of the recently minted cycle highs and apparent cheapness evident on the likes of the 10-/20-/30-Year butterfly structure. The well-documented basis issues hamper the hedging ability of futures, while the potential for further tests of the BoJ’s resolve provides further issues. This also provides some counter to the carry argument, with 20s currently providing the most attractive carry and roll proposition on the curve.
  • Note that there is the potential for domestic life insurers to provide at least some counter to these negatives given their previously outlined semi-annual investment intentions, although most desks remain cautious ahead of supply.
  • Short covering demand may provide some offset to the previously alluded to headwinds.
  • Also note that some desks have indicated the attractiveness of long ASW positions.
  • Results due at 0435BST/1235JST.