At the Tokyo lunch break, JGB futures are slightly stronger, +2 compared to the settlement levels.
- Cash US tsys are little changed in today's Asia-Pac session after yesterday's modest rally
- Cash JGBs are flat to 1bp cheaper across benchmarks. The benchmark 20-year yield is 0.5bp higher at 2.671% ahead of today's supply.
- Last month’s 20-year JGB auction showed mixed results across key metrics. The low price underperformed dealer forecasts, which were set at 98.85 according to a Bloomberg poll. Moreover, the cover ratio declined to 3.0853 from 3.1462x in the previous auction. The auction tail did, however, shorten to 0.13 from 0.18.
- Today’s 20-year JGB auction offers an outright yield near its cycle high, 10bps above last month’s level.
- Moreover, the 10/20 yield curve remains near its recent high, its steepest since 1999.
- Swap rates are flat to 1bp higher. Swap spreads are mixed.