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Tight Range For Futures As Curve Bull Flattens

JGBS

JGB futures nudged higher at the Tokyo re-open, as local participants reacted to Tuesday’s richening in wider core global FI markets, before the contract eased back towards late overnight session levels, hugging a tight range, hitting the lunch bell +11 on the day.

  • Cash JGBs sit little changed to ~3bp richer across the curve, with super long end demand evident (domestic life insurers may be at work further out the curve) during the Tokyo morning, allowing a bull flattening theme to develop.
  • Domestic news flow has been relatively limited thus far.
  • Today’s BoJ Rinban operations yielded the following offer/cover ratios:
  • 1- to 3-Year: 2.93x (prev. 3.29x)
  • 5- to 10-Year: 1.71x (prev. 2.00x)
  • 25+-Year: 2.46x (prev. 4.91x)
  • The moderation in cover ratios may result in a light bid for the space during early afternoon trade.
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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