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EGB/Gilt - Gilt outperforms


E-MINI S&P (Z1): Rally Extends


(H2) Still Looking For Gains


GBP1.147bln of long-dated gilts with offer-to-cover of 1.83x

BOND SUMMARY: T-Notes posted a leg higher as a BBG ran a headline noting that
Beijing will adopt strict closed-off management at all residential compounds,
triggering a bout of light risk-off flows. The headline returned focus to the
resurgence of Covid-19 in China's capital, which yesterday decided to close all
of its schools. Worth adding that familiar geopolitical concerns continue to
linger. T-Notes trade +0-03 at 138-17, slightly off session highs. Yield curve
has bull flattened in cash trade. Eurodollars sit unch. to +1.5 tick thru reds.
- JGB futures have erased earlier modest gains and last trade at 152.08, 8 ticks
above settlement. Cash JGB yields sit marginally lower across the curve. The BoJ
conducted 1-3, 5-10 & 25+ Year Rinban ops today, leaving purchase sizes across
all three baskets unchanged. Meanwhile, Japanese trade deficit was narrower than
expected as imports tumbled more than forecast.
- In Oz, YM +0.5 & XM +0.5 at typing, with yields marginally mixed in cash
trade. Bills last seen unch. to +3 ticks through the reds. The auction of ACGB
1.25% 21 May 2032 drew the lowest cover ratio since the RBA started QE, but the
number wasn't that bad vs. the prev. offering when adjusted for auction size.
MNI London Bureau | +44 203-865-3806 |
MNI London Bureau | +44 203-865-3806 |