Free Trial
USDCAD TECHS

Northbound

US TSYS

FI Support Evaporates Amid Late Month End Selling

AUDUSD TECHS

Remains Vulnerable

CANADA

Late Risk Off Sees USDCAD Eye Cycle Highs

US TSY OPTIONS

BLOCK, Late Puts

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: 40-Year JGB Supply Due

JGBS AUCTION

The Japanese MOF will today sell Y700bn of 40-Year JGBs re-opening JB#15. The MOF last sold 40-Year debt on May 26, with the auction drawing cover of 2.416x at a high yield of 1.070%, low price of 97.74, and 53.1502% of bids allotted at the high yield.

  • Outright 40-Year JGBs operate just off of cycle cheaps, within touching distance of the 1.50% level.
  • This, alongside the steepness of the domestic curve (in a local and international sense), with 5-/40-, 10-/40-, 20-/40- & 30-/40-Year yield spreads at/near cycle steeps, the Japanese investor base’s aversion to adding to international debt holdings owing to elevated FX-hedging costs and ongoing international market volatility (as evidenced by Japanese weekly international security flow data, which has shown continued shedding of foreign bonds over the last 2 months) and the preference of domestic life insurers to add to their super-long JGB holdings (per their semi-annual investment intention interviews) should all prove to be supportive for takedown at auction.
  • The recent recoupling of the 10-Year futures/cash basis & wider recession risk centred on the U.S. & Europe should also be supportive when it comes to demand.
  • The lack of relative BoJ control over this area of the curve and potential ‘scarring’ from the latest round of cheapening in the super-long end may provide incrementally limiting factors when it comes to wider demand.
  • Results are due at 0435BST/1235JST.
229 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 Y700bn of 40-Year JGBs re-opening JB#15. The MOF last sold 40-Year debt on May 26, with the auction drawing cover of 2.416x at a high yield of 1.070%, low price of 97.74, and 53.1502% of bids allotted at the high yield.

  • Outright 40-Year JGBs operate just off of cycle cheaps, within touching distance of the 1.50% level.
  • This, alongside the steepness of the domestic curve (in a local and international sense), with 5-/40-, 10-/40-, 20-/40- & 30-/40-Year yield spreads at/near cycle steeps, the Japanese investor base’s aversion to adding to international debt holdings owing to elevated FX-hedging costs and ongoing international market volatility (as evidenced by Japanese weekly international security flow data, which has shown continued shedding of foreign bonds over the last 2 months) and the preference of domestic life insurers to add to their super-long JGB holdings (per their semi-annual investment intention interviews) should all prove to be supportive for takedown at auction.
  • The recent recoupling of the 10-Year futures/cash basis & wider recession risk centred on the U.S. & Europe should also be supportive when it comes to demand.
  • The lack of relative BoJ control over this area of the curve and potential ‘scarring’ from the latest round of cheapening in the super-long end may provide incrementally limiting factors when it comes to wider demand.
  • Results are due at 0435BST/1235JST.