REFINING: China Crude Oil Throughput rose 6.4% in October: NBS

Japanese politics remains in a state of uncertainty, with opposition parties holding the balance of power on whether to back the governing Liberal Democratic Party (LDP)'s new president, Sanae Takaichi, to succeed Shigeru Ishiba, or to pursue a three-party alliance to nominate an opposition figure. Takaichi has held in-person meetings with all three main party leaders today, with the opposition leaders also holding their own talks. 

• Conservative populist Democratic Party for the People (DPFP) leader Yuichiro Tamaki says that there is "still some distance" between his party and the main opposition liberal Constitutional Democratic Party (CDP). Says he suggested another party leaders' meeting on Monday, 20 Oct, a day before the scheduled election of a new PM.
• Tamaki says that "on basic policies, there is a lot of overlap between us and the LDP". Says Takaichi is looking for an LDP-DPFP coalition, but that the LDP must "first build a relationship of trust..."
• CDP leader Yoshihiko Noda said, "If the opposition works together, we have a chance to take power", adding, "the chances of a three-party agreement are not zero".
• Libertarian-federalist Japan Innovation Party (Ishin) co-leader Fumitake Fujita was circusmspect, saying that he did not make any major proposals in today's meetings, and that there was "no specific discussion on naming a PM candidate".
• Political betting markets have shifted back in Takaichi's favour. Data from Polymarket shows bettors assigning a 91% implied probability she becomes PM, up from a low of 63.8% on 10 Oct. Tamaki's apparent coolness towards an opposition alliance and talking up similarities with the LDP looks to have seen Takaichi's prospects recover. 

Chart 1. Political Betting Market, Implied Probability of Next Japanese PM, %

Source: Polymarket

This morning, Germany will hold a 30-year Bund auction. On offer will be E1.0bln of the 0% Aug-50 Bund (ISIN: DE0001102481) alongside E1.5bln of the 2.90% Aug-56 Bund (ISIN: DE000BU2D012).

• Recent auctions in the German 30y segment have seen demand metrics which were uneven at best and, on balance, signal weak current primary demand for the long end of the German curve. In 2025, bid-to-covers ranged between 1.03x and 7.80x, while bid-to-offers ranged between 0.79x to 7.75x. For both of these metrics, there was a net downward trend since around April. Pre-auction midprices were above the lowest accepted prices achieved at the auction throughout the year with the exception of the 20 August re-open of the 2.50% Aug-54 Bund.
• The 0% Aug-50 Bund was last issued in February, achieving a solid 2.78x bid-to-cover and a 2.28x bid-to-offer. Other 30-year auctions since then have generally not been as strong. The 2.90% Aug-56 Bund meanwhile was last sold on September 17, seeing a 1.82x bid-to-cover and a 1.37x bid-to-offer.
• The next German auction will be E750mln of the 1.30% Oct-27 Green Bobl (ISIN: DE0001030740) alongside E750mln of the 2.50% Feb-35 Green Bund (ISIN: DE000BU3Z047). The last 30-year German auction of the year will be on November 12, with the 2.90% Aug-56 Bund on offer again alongside another line.
• Timing: Results will be available shortly after the bidding window closes at 10:30BST / 11:30CET.

SFIH6 96.25/96.05/95.85p fly, bought for 4.75 in 5.5k.