Core bonds have edged away from best...>

BOND SUMMARY: Core bonds have edged away from best levels, after T-Notes legged

higher into the NY close on the back of hawkish trade rhetoric from U.S. Tsy Sec

Mnuchin & TR Lighthizer. T-Notes last 123.25, cash 10-Year Tsy yields last at

2.480%. Overnight option flow has seen put exposure rolled into TYN9 & the TYN9

123.00/122.00 put spread blocked. There has also been some upside focus, with

the 2MK9 124.25/126.00 1x2 call spread bought on block.

- Aussie bond futures have largely tracked Tsys, looking through the latest

round of local data, ahead of today's RBA MonPol decision. OIS price a ~51%

chance of a cut at today's meeting, with 15 of the 29 economists surveyed by BBG

looking for such a move. YM & XM last unch.

- JGB futures ticked higher as traders returned from holiday. Futures went into

the lunch break 13 ticks above the most recent settlement, with the BoJ leaving

the size of its 1-5 & 10-25+ Year Rinban operations unchanged, offer to cover

ratios as follows: 1-3 Year 2.73x (prev. 3.12x), 3-5 Year 2.64x (prev. 2.20x),

10-25 Year 3.76x (prev. 3.65x), 25+ Year 4.59x (prev. 2.98x).

- German FI ticked higher, Schatz +1.0 tick, Bobls +5.0 ticks, Bunds +11 ticks.