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Sedate Morning, Wider Liquidity Shortage Hampers Activity

JGBS

A sedate round of morning trade saw JGB futures confined within the boundaries of the contract’s overnight range, hitting the bell +6 vs, yesterday’s settlement, little changed vs. late overnight levels, while cash JGB trade sees the major benchmark JGBs within -/+0.5bp of their respective Thursday closing levels. Wider headline flow has been very limited given the previously outlined holidays in several major financial centres.

  • The latest round of BoJ Rinban operations saw the following offer/cover ratios:
  • 1-to 3-Year: 2.47x (prev. 1.92x)
  • 3-to 5-Year: 2.23x (prev. 2.28x)
  • 25+-Year: 3.22x (prev. 4.38x)
  • This combination may exert some modest twist flattening pressure on the curve in early afternoon dealing, but we wouldn’t expect any such move to be forceful. Spreads were little changed to a touch wider when compared to the previous operations covering these buckets.
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com

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