A limited range for Tsys, with.........>

BOND SUMMARY: A limited range for Tsys, with little in the way of tier one news

flow during Asia-Pac hours. T-Notes last -0-00+ at 127-11, with yields 0.6-1.0bp

lower across the curve. Eurodollar futures are little changed thru the reds.

- JGBs futures have stuck to a tight range (-3 ticks last), with the super-long

end witnessing some outperformance in cash trade, as the curve twist flattens.

Several well followed strategists have expressed a preference for longer dated

curve flatteners in recent times, so may be taking advantage of yesterday's

post-auction sell off in 40-Year paper to add to/initiate positions.

- Aussie bond futures moved to fresh highs after Westpac lowered its call re:

the RBA's terminal cash rate to 0.50% (prev 0.75%), and frontloaded its call for

the next rate cut to Oct. (prev. Nov). This followed an uptick observed on the

back of worrying signals re: the labour mkt within the latest CBA PMI survey,

coupled with an APRA announcement which noted that it required Macquarie,

Rabobank & HSBC to tighten the intra-group funding arrangements for their

Australian operations. YM last +4.0 ticks, XM +2.0 ticks, resulting in some bull

steepening. Bills trade 4-5 ticks higher through the reds.