SOUTH KOREA: Bond Futures Oversold as Rout Continues

The Japanese Ministry Of Finance (MoF) sells Y536.8bn 30-Year JGBs:

• Average Yield (%): 3.248 (prev. 3.264)
• Average Price: 99.27 (prev. 92.98)
• High Yield (%): 3.259 (prev. 3.277)
• Low price: 99.10 (prev. 92.80)
• % Allotted At High Yield (%): 41.4864 (prev. 5.2264%)
• Bid/Cover: 3.4110x (prev. 3.3080x)

Bitcoin had a range overnight of $123 334k - $126 251k, Asia is trading around $124 320k, -0.75%. Bitcoin once more found solid buyers on the dip back towards its first support around $108 000 at the end of September. Big support remains in between the $100k-108k area where demand should return for those waiting to “buy the dip”, the crypto treasury firm's chief amongst those. Risk has surged higher across the board(stocks, gold, silver) and this time bitcoin was not missing out as it hit new all-time highs to join the party.

• CNBC - “Paul Tudor Jones says ingredients are in place for a massive rally before a ‘blow off’ top to bull market. He believes the bull market still has room to run before it reaches its final phase. He said he would own a combination of gold, cryptocurrencies and Nasdaq tech stocks between now and the end of the year to take advantage of the rally fueled by the fear of missing out.”
• Andreas Steno Larsen on X: "Bitcoin has flipped correlations with long bond yields since the pandemic, this is a big shift.”
• Milk road on X: “Bitcoin’s sitting just 3% below an 8 year resistance trendline. If the weekly candle closes above $128K, the line that’s capped every rally since 2017 finally breaks.” See Graph Below.

Fig 1: Bitcoin spot Weekly Chart

Source: MNI - Market News/Bloomberg Finance L.P

At the Tokyo lunch break, JGB futures are weaker, -17 compared to the settlement levels, but off the session’s worst levels.

• “BoJ says 2025 Paris Europlace Forum in Tokyo scheduled for Wed. was called off and Governor Kazuo Ueda’s speech was cancelled as a result.” – BBG
• (Bloomberg) With Sanae Takaichi poised to become Japan’s first female prime minister, economists warn her policies may have mixed results: expansionary measures that spur growth but exacerbate fiscal strain, and coalition partners who temper a more hawkish stance on China amid a push for higher military spending.
• Cash US tsys are flat to 1bp cheaper, with a steepening bias, in today's Asia-Pac session after yesterday's modest sell-off.
• Cash JGBs are 1-4bps cheaper across benchmarks. The benchmark 30-year yield is 4.3bps higher at 3.35% ahead of today's supply.
• Last month’s 30-year bond auction delivered mixed results. The low price matched dealer expectations of 92.80, per the Bloomberg survey. However, the cover ratio fell to 3.31x from 3.43x.and the auction tail lengthened to 0.18 from 0.15, indicating a softening in bidding strength.
• This month’s 30-year JGB auction features an outright yield at a new cycle high of 3.351%, approximately 10bps higher than last month’s issuance.
• Swap rates are flat to 2bps lower, with swap spreads tighter.