A limited session for the core.........>

BOND SUMMARY: A limited session for the core global FI space when compared to

the recent offerings, with a stronger than exp. CNY fix & an uptick in Chinese

ind. profits providing the highlights. T-Notes in a tight range, last +0-07 at

131-00, with flow centred on the rolls. Yields 1.2-1.4bp lower across the curve.

- Aussie Bond futures see YM & XM -3.5. Bills unch. to 4 ticks lower through the

reds. RBA Dep. Gov. Debelle suggested that the floor for rates in Australia is

likely 0.0-0.5%. Debelle also noted that if rates got down to "around 0.5%" then

the bank would have to consider "other options." BoFAML recently wrote that "the

RBA is likely to put negative rates way down the list and not only because of

the likely impact on sentiment. Fiscal policy and the currency channel still

have more scope to support growth while the operation of the rate corridor means

a move below 0.5% for the cash rate would meet the zero bound."

- JGB futures pulled back from yesterday's all-time highs, -22 ticks last. Cash

trade has seen light bear steepening after yesterday's aggressive, potentially

cash-led, rally. The latest 15.5-39 Year JGB auction saw a tick up in the cover

ratio, but that may have been a product of wider yield spreads.