PREVIEW: The Japanese MOF will today...>

JGBS AUCTION: PREVIEW: The Japanese MOF will today sell Y700bn of 30-Year JGBs

re-opening #JB62. The MOF last sold 30-Year debt on April 4, the auction drew

cover of 4.555x at an average yield of 0.540%, average price of 98.96, high

yield of 0.542%, low price of 98.90, with 18.8092% of bids allotted at the high

yield.

- Continued uncertainty surrounding U.S.-China trade matters will likely provide

some support for the auction, with this morning's light concession allowing for

a slightly more attractive entry point. The trend of guarded global central bank

rhetoric should also support demand. The recent reduction in the size of the

BoJ's 5-10 Year purchases may stymie demand, although most believe that there is

little chance of another reduction in the short term.

- The line trades at the richer end of its recent range in ASW terms, but

doesn't look rich against 20-Year paper on this basis, despite 20-Year's recent

cheapening, although 20-Year paper offers a more attractive carry & roll

proposition. The JGB curve continues to look flat, with the 20-/30-Year yield

spread trading 3.0bp above its recent cycle low. Results due at 0435BST/1235JST