JGB TECHS: (Z5) Cycle Lows
- RES 3: 140.08 - High Jun 13
- RES 2: 139.05 - High Aug 4
- RES 1: 137.30 - High Sep 8 and key short-term resistance
- PRICE: 135.12 @ 16:19 GMT Nov 20
- SUP 1: 134.87 - 3.0% Lower Bollinger Band
- SUP 2: 134.56 - Low Nov 19 & Cycle Low
- SUP 3: 134.25 - 1.0% 10-dma envelope
Prices traded to new pullback and cycle lows Thursday, weighed by the weaker currency and breach of support in futures prices. This affirms the firm downtrend that’s dominated prices since mid-September, and prices will need to challenge resistance before signaling any broader reversal. Key short-term resistance has been defined at 137.30, the Sep 8 high.
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AUSSIE BONDS: ACGB Jun-35 Supply Faces A Lower Yield & A Flatter Curve
The Australian Office of Financial Management (AOFM) will today sell A$900mn of the 2.75% 21 June 2035 bond, issue #TB145. The line was last sold on 1 August 2025 for A$1200mn. Bidding is likely to be shaped by several key factors:
- The current yield for this bond is approximately 20bps lower than the level of the previous auction and 60bps below the high recorded in early November 2024.
- The 3/10 yield curve is slightly flatter than the previous auction and sits around 40bps below its recent high.
- Notably, investor sentiment toward longer-dated global bonds has improved recently.
- The inclusion of the Jun-35 line in the XM basket may also lend support to demand.
- Results are due at 0100 BST / 1100 AEST.
AUSSIE BONDS: AUCTION PREVIEW: ACGB Jun-35 Supply Due
The Australian Office of Financial Management (AOFM) will today sell A$900mn of the 2.75% 21 June 2035 bond, issue #TB145. The line was last sold on 1 August 2025 for A$1200mn.
- The sale drew an average yield of 4.2953%, at a high yield of 4.2975% and was covered 3.300x. There were 38 bidders, 17 of which were successful and 10 were allocated in full. The amount allotted at the highest yield as a percentage of the bid at that yield was 36.1%.
- This week's ACGB supply is near the top of the recent weekly issuance range of $1500-2200mn, with A$300mn of the 4.75% 21 June 2054 bond issued yesterday and A$800mn of the 2.75% 21 November 2029 bond on Friday.
- During the first half of 2025-26, the AOFM plans to: issue a new October 2036 Treasury Bond (by syndication and subject to market conditions); conduct 2 Treasury Bond tenders most weeks; hold 1-2 Treasury Indexed Bond tenders each month.
- Issuance of Treasury Bonds (including Green Treasury Bonds) in 2025-26 is expected to be around $150 billion. Issuance of Treasury Indexed Bonds in 2025-26 is expected to be between $2 billion and $3 billion.
- Results are due at 0100 BST / 1100 AEST.
JGBS: Futures Sold Overnight, Vulnerable To Further Weakness
In post-Tokyo trade, JGB futures (136.04) closed weaker, -10 compared to settlement levels, despite US tsys finishing Tuesday's session with a modest bull-flattener.
- MNI Tech: Key short-term resistance for JB1 has been defined at 137.30, the Sep 8 high. The latest sell-off, however, resulted in a break of support at 136.19, the Sep 4 low and a bear trigger. Clearance of this level confirms a resumption of the downtrend and opens 135.39 next, a Fibonacci projection. (see chart)
- Overnight, bullish momentum continued to underpin US tsys. The long end of the US curve led the way again with the 30-year rate richening 2.6bps to 4.54%, the lowest since April. The US 2-year yields was unchanged.
- Focus will be on fiscal policy support in the near term, with incoming FinMin Katayama, already studying a proposal to temporarily reduce the sales tax on food to flat (per BBG), which is a request from LDP partner Ishin. Still, with the LDP remaining a minority government, negotiations with opposition parties will still be essential to realising policies.
- Today, the local calendar will see Trade Balance data.
Bloomberg Finance LP
