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‌PREVIEW: 30-Year Supply On Deck, ASWs Eyed Again?

JGBS AUCTION

The Japanese MOF will today sell Y900bn of 30-Year JGB's opening JB#68. The MOF last sold 30-Year debt on September 3, the auction drew cover of 3.496x at an average yield of 0.611%, average price of 99.71, high yield of 0.617%, low price of 99.55, with 89.4984% of bids allotted at the high yield.

  • Market activity over the last 24-hours or so has built in a little concession, which makes the auction incrementally more attractive in headline yield terms, with headline yield now incrementally more attractive than last month's auction.
  • The 5-/30-Year yield spread hovers around multi-year steeps. While the issuance burden has become less of an issue for markets in recent weeks, analysts remain cautious re: the implementation of longer dated flattener plays, although some of the popular steepened plays have now been unwound.
  • Longs ASWs may provide the most attractive entry point at this particular auction.
  • Results due at 0435BST/1235JST.
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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