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Consolidation Mode


Maintains A Bullish Tone


Corrective Cycle Still In Play


BanRep Preview – October 29 1900BST/1400ET


The Japanese MOF will today sell Y900bn of 30-Year JGB's re-opening JB#67. The MOF last sold 30-Year debt on August 18, the auction drew cover of 3.445x at an average yield of 0.617%, average price of 99.57, high yield of 0.625%, low price of 99.35, with 26.1213% of bids allotted at the high yield.

  • While some eye seasonal flows as a potential source of outright support in the coming weeks, most remain wary of the supply pressure evident in the longer end of the curve, with a lack of relative BoJ Rinban support also evident.
  • Still, there is a bias towards steepening within the sell side which may see the traditional positioning headwinds limit any such move, absent of fresh fundamental drivers. The 5-/30-Year yield spread hovers around the middle of the range witnessed since the start of July.
  • Some may look for ASW entry given the current levels.
  • Last month's auction was weak, and the short turnaround in between auctions may provide a further headwind for the space.
  • Results due at 0435BST/1235JST.
MNI London Bureau | +44 0203-865-3809 |
MNI London Bureau | +44 0203-865-3809 |