The JGB space operated in a fairly limited.....>

JGBS: The JGB space operated in a fairly limited fashion on Monday, ahead of a

holiday shortened week & in front of the FOMC MonPol decision on Wednesday.

- A slight uptick in the 5-10 Year bucket's offer to cover ratio in the latest

Rinban operations saw the sell side favoured in the latter part of the session,

although the stronger JPY & lower Nikkei 225 added support. The super-long end

remained firm heading in to FY end.

- Focus today will fall on the enhanced liquidity auction for old 10, 20 &

30-Year JGBs.

- The US Tsy curve bear flattened on Monday, although T-Notes finished around

the middle of the range.

- Barclays suggest that "today could initially see a bias toward correction in

the JGB market given the slight decline in US Tsys overnight and today's

liquidity enhancement auction for 5-15.5y issues in Japan, but we expect the

auction to clear smoothly and the market to remain firm amid risk-off sentiment

and favourable supply and demand into the fiscal year-end.