PREVIEW: Familiar Themes At Play

The Japanese MOF will today sell Y2.5tn of 5-Year JGB's re-opening #JB144. The MOF last sold 5-Year debt on July 9, the auction drew cover of 4.254x at an average yield of -0.103%, average price of 101.01, high yield of -0.101%, low price of 101.00, with 82.5283% of bids allotted at the high yield.

• 5s sit ~2.0bp cheaper than the average yield that prevailed at the previous round of 5-Year supply, moving back from the range cheaps in recent sessions.
• ASWs sit off the March highs, but remain elevated over a longer horizon, although this has been the case for some time.
• The 2-/5-/10-Year fly hovers around the middle of the range observed since the start of April.
• Rinban dynamics should provide continued support for auctions out to 10-Years, given the BoJ's active Rinban approach covering this area of the curve.
• Results due at 0435BST/1235JST.