A recovery in Chinese equity markets...>

BOND SUMMARY: A recovery in Chinese equity markets weighed on Tsys, with

confusion surrounding the Democratic caucus in Iowa potentially having some

impact as well (matters covered in earlier bullets). T-Notes -0-07 at 131-11+,

off lows, yields 1.3-2.2bp higher across the curve, as the belly underperforms.

- Aussie bonds took a hit in the wake of the RBA failing to meet dovish

expectations as it left its cash rate unchanged at its first meeting of 2020.

The most hawkish note was probably struck by the RBA's failure to signal any

notable lower revisions (if any at all) for its GDP outlook, even as it flagged

near term headwinds i.e. Coronavirus & bushfires. YM -3.0, XM unch., off

reaction lows, but still comfortably lower vs. pre-decision levels. Bills sit

2-5 ticks lower on the day vs. settlement through the reds. IBs now price ~30%

chance of a cut at next month's decision vs. ~55% yesterday.

- JGB futures were dragged lower by the broader impetus in the Tokyo morning (as

well as set up for supply), before a solid enough 10-Year JGB auction (steadyish

cover, steady tail & a low price topping dealer exp.) was seen. Contract edged

away from worst levels, last -5, with the belly underperforming in cash trade.