JGBS: Cash Bond Twist-Flattener At Lunch
Sep-12 02:40
At the Tokyo lunch break, JGB futures are weaker, -18 compared to the settlement levels. * A majori...
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JGBS AUCTION: PREVIEW: 5-Year JGB Auction
Aug-13 02:39
The Japanese Ministry of Finance (MoF) will today sell Y2.4tn of 5-Year JGBs. The MoF last sold 5-year debt on 8 July 2025, with the auction drawing cover of 3.5411x at an average yield of 0.989%, an average price of 100.05, a high yield of 0.993%, a low price of 100.03, with 6.9288% of bids allotted at the high yield.
- Last month’s 5-year bond auction demonstrated showed mixed signals on demand. The low price came in line with expectations at 100.03, but the bid-to-cover ratio declined to 3.5411x from 4.5783x—albeit the highest since 2023. Meanwhile the tail narrowed slightly to 0.02 from 0.05, pointing to improved bidding interest.
- Today’s auction also after this month’s 10-year bond auction delivered weak results, with the low price failing to meet expectations at 100.21, according to the Bloomberg dealer poll. Moreover, the cover ratio decreased to 3.0592x from 3.5070x, and the tail lengthened to 0.14 from 0.03.
- Results are due at 0435 BST / 1235 JST.
STIR: RBA Dated OIS Softer Than Yesterday’s Pre-RBA Levels
Aug-13 02:24
RBA-dated OIS pricing is modestly softer across meetings today following yesterday’s decision by the RBA to lower the cash rate by 25bps to 3.60%.
- At the time of writing, pricing across meetings was 2-8bps softer than yesterday’s pre-RBA levels.
- A 25bp rate cut in September is given a 37% probability, with a cumulative 40bps of easing priced by year-end.
Figure 1: RBA-Dated OIS – Current Vs. Pre-RBA
Source: Bloomberg Finance LP / MNI
RBA: MNI RBA Review-August 2025: Target Achieved With More Cuts
Aug-13 02:20
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- The RBA made the unanimous decision to cut rates 25bp to 3.60%, as expected, with a larger move was not discussed.
- Around another 75bp of easing is assumed in the updated staff forecasts which results in underlying inflation at around the 2.5% band mid-point from H2 2025. Thus, more rate cuts are likely going forward dependent on the data developing broadly as the RBA expects
- Governor Bullock said that the Board continues to take things at a “measured pace”. While, she didn’t rule out “back-to-back cuts”, the next rate reduction is likely to again coincide with the Statement on Monetary Policy, which will be on November 4.
- RBA-dated OIS pricing has a 25bp rate cut in September is given a 37% probability, with a cumulative 52bps of easing priced by year-end.
