BOJ: Fixed Rate Purchase Offer​

The Australian Office of Financial Management (AOFM) sells A$700mn of the 3.00% 21 November 2033 Bond, issue #TB166:

• Average Yield: 3.9913% (prev. 3.3491%)
• High Yield: 3.995% (prev. 3.3525%)
• Bid/Cover: 4.7071x (prev. 3.8671x)
• Amount allotted at highest accepted yield as a percentage of amount bid at that yield: 1% (prev. 55.4%)
• Bidders: 46 (prev. 41), successful 11 (prev. 7), allocated in full 8 (prev. 3)

JGB futures are holding cheaper, -4 compared to settlement levels.

• Cash US tsys are 0.5bp cheaper to 3bp richer across the major benchmarks after being closed yesterday for the Independence Day holiday. The curve is steeper.
• Jibun Bank and IHS Markit release June composite PMI. The index falls to 52.1 from 54.3 in May; a year ago 53. It was the lowest reading since Feb. 2023. New orders fall to 53.3 vs 54.7 in May.
• Cash JGBs are richer across benchmarks with the benchmark 10-year yield 1.4bp lower at 0.373%, below the BoJ's YCC limit of 0.50%. Today’s dealing comes after yesterday’s 10-year auction showed solid demand with the low-price exceeding forecasts, the cover ratio reaching a four-month high of 4.024x, and the tail narrowing to its lowest level in four months. According to Bloomberg, MUFJ-MS bought 35.3% of 10-Year JGBs auctioned yesterday (See link).
• The swaps curve has twist flattened with swap spreads wider.