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The morning session was a sedate affair,.......>

JGBS
JGBS: The morning session was a sedate affair, with JGB futures ticking back
from their overnight highs and yields a little lower across the curve as the
space broke for lunch.
- That was before the super long end of the JGB curve came under some pressure
on the back of a disappointing 40-Year auction which saw the high yield top
dealer exp., while the cover ratio softened vs. the prior auction (representing
the softest cover ratio seen for this tenor since Nov 2017)., resulting in some
twist steepening of the curve. Futures knee jerked lower on the auction result,
before recovering, to last trade 5 ticks above settlement levels.
- It is worth highlighting our latest insight piece, which notes that "concern
over Japan's weaker economy and the output gap's influence on achieving the 2%
inflation target may prompt the Bank of Japan board to discuss a pre-emptive
easing next week."
- Flash PMI data headlines the local docket tomorrow.
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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