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JGBS AUCTION

PREVIEW: 2-Year JGB Supply Due

JGBS

Curve Twist Steepens, Futures Narrow

US EURODLR FUTURES

EDU2/Z2/H3 Fly Given

US TSY OPTIONS

TYF2 132.00 Calls Still Being Lifted

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The Japanese MOF will today sell Y600bn of 40-Year JGB's re-opening JB#14. The MOF last sold 40-Year debt on September 28, the auction drew cover of 2.525x at a high yield of 0.770%, low price of 97.62, with 40.9523% of bids allotted at the high yield.

  • Outright 40-Year yields hover around the midpoint of the YtD range. The 30-/40-Year yield spread also hovers around its own YtD midpoint, shaking off some flattening pressure that became apparent in October. This shouldn't present any impediments to demand.
  • Meanwhile, press reports surrounding the issuance burden created by the impending fiscal stimulus package point to a relatively digestible uptick in issuance requirements, which shouldn't deter bidders ahead of today's supply.
  • Results due at 0335GMT/1235JST.