JGBS AUCTION: Strong 30Y Auction Result
The 30-year JGB auction delivered strong results. The low price exceeded dealer expectations of 96.40 (Bloomberg survey), the cover ratio jumped to 4.0445x—the highest since 2019—from 3.1248x, and the auction tail narrowed sharply to 0.09 from 0.27, all pointing to firmer bidding.
- Today’s outcome is consistent with this month’s 10-year auction, which also showed robust demand.
- As noted in our preview, today’s issuance came at an outright yield 30–35bps above last month’s level.
- The 30-year yield has richened by roughly 5bps in the afternoon session.
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AUSTRALIA: Reaction To RBA
The AUD went into the RBA meeting trading around 0.6535(-0.05%) and the SPI was trading around 8836.0(-0.75%).”RBA LEAVES CASH RATE TARGET AT 3.60%; EST. 3.60%, MAY BE ‘LITTLE MORE’ CORE INFLATION PRESSURE THAN THOUGHT." The AUD has moved a few spreads lower as the market was perhaps looking for a more hawkish outcome.
- AUD/USD - 0.6525, -0.20%
- AUD/NZD - 1.1450, +0.05%
- EUR/AUD - 1.7665, -0.20%
- AUD/JPY - 100.55, -0.25%
- SPI(XPU5) - 8856, -0.50%
RBA: Rates Unchanged, Core Inflation Above Band Until Q4 2026
The RBA left rates at 3.6% as was widely expected. It sees trimmed mean inflation above the 3% top of the band until end-2026 and not returning to close the 2.5% mid-point until 2027. The further out a forecast is, the greater the uncertainty around it. See statement here. More details to follow.
MNI: RBA LEAVES CASH RATE AT 3.6%
- MNI: RBA LEAVES CASH RATE AT 3.6%
