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The 20-Year sector is unwinding some of the....>

JGBS: The 20-Year sector is unwinding some of the concession that was evident
ahead of today's 20-Year JGB supply, aided by the low price of the auction
meeting the BBG dealer poll exp. and a slightly higher cover ratio when compared
to the most recent auction. The tail of today's auction was a touch wider than
that seen at last month's 20-Year offering, although the average yield was ~5bp
- The auction comes at a time when demand for super-long paper is under
question, in the short term at least, after the BoJ trimmed the size of its
10-25 Year JGB purchases last week, which triggered a surge in the offer to
cover ratio at this week's 25+ Year Rinban operations (as the measure touched a
near 5-Year high). The latest 10- & 30-Year JGB auctions, conducted on Feb 5 &
Feb 7 respectively, were stellar, with many suggesting that lifers were
underweight super-long paper heading into FY end. No particular signs of
weakness were observed in the latest round of supply.
- Futures have ticked away from lows on the back of the auction.
MNI London Bureau | +44 0203-865-3809 |
MNI London Bureau | +44 0203-865-3809 |

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