The space stuck to a tight range despite the...>

JGBS: The space stuck to a tight range despite the uptick in the JPY & softer

domestic equity backdrop. Futures closed 2 ticks higher at 150.89. 

- The cash space saw 3-Year reverse its AM session underperformance, while the

belly underperformed in the afternoon. The shift in tone came as a result of the

BoJ's Rinban operations where the offer to cover ratio dipped notably in the 1-3

Year bucket, the ratio was relatively stable in the 3-5 Year bucket, while the

5-10 Year bucket saw the offer to cover ratio jump to 3.72 from 2.71 at the

prior operation covering the tenors.

- From a technical perspective the recovery from 200-DMA tests that defined last

week appears to be in trouble with follow through lacking above the 21-DMA

(150.89). Bulls now need a close above 150.97 to confirm focus on layers of

resistance 151.15-19. The 150.85 support is key today. Bears now need a close

below this level to return focus to 150.55-150.73 where key DMAs are clustered.

Below 150.55 is needed to target 150.36 and then 150.08-09 where 2018 and Oct

lows are noted.