Subdued Session, 30Y Auction Shows Less Demand

JGB futures are stronger, 18 compared to settlement levels, after today’s 30-year supply.

• Like Tuesday’s 10-year auction, today’s 30-year supply went smoothly although less demand was seen. The low price beat dealer expectations but the cover ratio decreased to 2.972x from 3.591x in June. The auction tail did however narrow slightly.
• Outside of the previously outlined weekly International Investment Flow data, there hasn't been much in the way of domestic drivers to flag.
• Cash US tsys are closed for the 4^th of July holiday. The focus is on the US employment report on Friday.
• Cash JGBs are 1bp richer to 1bp cheaper, with the futures-linked 7-year outperforming and the 40-year underperforming. The benchmark 10-year yield is 1.4bps lower at 1.072%.
• The 30-year is little changed in post-auction dealing at 2.278%.
• The swaps curve has bear-steepened, with rates flat to 2bps higher. Swap spreads are wider.
• Tomorrow, the local calendar will see Household Spending data along with the Leading & Coincident Indices.