US TSYS: Asia Wrap - Quiet Session
May-15 03:49
TYM5 has traded slightly lower within a range of 109-18+ to 109-22 during the Asia-Pacific session. It last changed hands at 109-22, down 0-01 from the previous close
- The US 2-year yield has drifted lower, dealing around 4.049%, unchanged from its close.
- The US 10-year yield has drifted lower, dealing around 4.53%, down 0.01 from its close.
- (Bloomberg) -- “Taiwan’s Ministry of Finance said its reviews of US Treasury positions at state-backed banks and their internal risk-management measures have so far found no major issues.”
- “Fedspeak: Mary Daly said the economy’s strength allows policymakers to be patient. Philip Jefferson said tariffs and related uncertainty may slow growth and boost inflation but monetary policy is well positioned to respond.’(BBG)
- The 10-year Yield has broken above the 4.50% resistance. A sustained break above this level could see another round of selling targeting the 4.75% area. Support now seen back towards 4.35/40 where supply should now be seen.
- Data/Events : Retail Sales, PPI, Weekly Claims, Industrial Production and Capacity Utilization
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JGBS AUCTION: Poor Demand Metrics For 20Y Auction
Apr-15 03:48
The 20-year JGB auction delivered poor results across key metrics. The low price underperformed dealer forecasts, which were set at 100.40 according to a Bloomberg poll. Moreover, the cover ratio decreased to 2.9639x from 3.4594x in the previous auction and the auction tail lengthened dramatically to 0.34 from 0.20.
- As noted in the auction preview, today’s offering featured an outright yield at a cycle high, 15bps higher than last month’s auction.
- Moreover, the 10/20 yield curve was at its steepest since 1999 and the 20-year JGB was at its cheapest valuation within the 10/20/30 butterfly since early 2023.
- As a consequence, this result is likely to be seen as significantly worse than the mixed performance observed in the 30-year JGB auction earlier this month.
- Post-auction, the 20-year JGB is little changed.
JGBS AUCTION: 20-Year JGB Auction Results
Apr-15 03:40
The Japanese Ministry of Finance (MOF) sells Y750.9bn 20-Year JGBs:
- Average Yield: 2.349% (prev. 2.278%)
- Average Price: 100.69 (prev. 96.20)
- High Yield: 2.374% (prev. 2.294%)
- Low price: 100.35 (prev. 96.00)
- % Allotted At High Yield: 40.8163% (prev. 44.1031%)
- Bid/Cover: 2.9639x (prev. 3.4594x)
JGBS AUCTION: 20Y Supply Faces A Cyclical High Yield & A Steeper Curve
Apr-15 03:32
The Japanese Ministry of Finance (MoF) will today sell Y1.0tn of 20-Year JGBs.
- Today’s 20-year JGB auction offers an outright yield at its cycle high, approximately 15bps above last month’s level.
- Moreover, the 10/20 yield curve has steepened dramatically over the past month, hitting its steepest since 1999.
- Additionally, the 20-year JGB has cheapened to its cheapest valuation within the 10/20/30 butterfly since early 2023.
- On the other hand, the auction comes amid souring sentiment toward long-term global bonds.
- Given these dynamics, it remains to be seen whether today’s supply can generate some positive momentum for JGB auctions or if market caution will weigh on demand.
- Results are due at 0435 GMT / 1235 JT.
