AUD: A$ Outperforms Following Slightly Higher Q1 CPI Print, US GDP Out Later

The Japanese Ministry of Finance (MoF) will today sell Y2.6tn of 2-Year JGBs. The MoF last sold 2-year debt on 27 February 2025, the auction drew cover of 3.1637x at an average yield of 0.826%, an average price of 99.948, a high yield of 0.833%, a low price of 99.935, with 62.4996% of bids allotted at the high yield.

• Last month’s 2-year auction saw a significant tapering in demand, with the cover ratio falling to 3.1637x from 4.06x and the auction tail lengthening compared to the previous month.
• Aligning with that result, this month’s 5-year auction showed weak demand metrics, with the auction price failing to meet expectations, the cover ratio declining to 3.1658x from 3.8158x and the auction tail lengthened to 0.07 from 0.03.
• Results are due at 0335 GMT / 1235 JST.

• As the PBOC injected liquidity in this morning’s OMO, bond futures jumped.
• China’s 10YR is up +.125 today at 108.010.
• The 10YR has broken through the 100-day EMA of 107.92 with the next key level the 50-day EMA at 108.06.
• China’s 2YR bond future is going in the other direction, down -0.02 at 102.42.
• Having traded above the 20-day EMA at 102.44 briefly, the 2YR now sits below that trend line.
• Having finished last week lower in yields, the CGB10YR is better bid this morning, -0.5bps lower in yield

*JAPAN 2Y GOVT BOND AUCTION MAY HAVE 100.055 LOWEST PRICE: POLL – BLOOMBERG