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The JGB curve twist-flattened on Friday. The...>

JGBS
JGBS: The JGB curve twist-flattened on Friday. The morning session saw sellers
benefit from risk-on flows & US Tsy weakness overnight, but the super-long end
held firm
- The size of Friday's Rinban sizes remained unchanged across all sectors, with
supportive factors noted for the longer dated operations, allowing the
super-long to drive further bull-flattening, while the shorter dated buckets saw
less favourable developments.
- Barclays suggest that the "market is likely to remain firm this week on solid
supply and demand. Returns on FX-hedged US Tsys have deteriorated on rising USD
funding costs, while entrenched JPY appreciation pressures make it difficult for
the BoJ to reduce its buying operations. Although the market could meet upside
resistance given the current level of super-long yields, we believe JGBs could
rally another notch depending on overseas yields and risk sentiment. This week's
highlights include Tuesday's 5-Year JGB auction & Thursday's 20-Year JGB
auction."
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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