Core FI drifted lower in Asia-Pac......>

BOND SUMMARY: Core FI drifted lower in Asia-Pac hours, following the steepening

impetus seen in Tsys during U.S. hours, with some suggesting fresh money was

being put to work establishing short Tsy positions with month-/quarter-end out

of the way. Light JPY outperformance within G10 FX likely helped to limit losses

in T-Notes. Contract last -0-05+ at 139-00, hovering just above session lows as

volume nears 100K lots for that contract. Bear steepening apparent in cash

trade.

- JGBs were pressured by some idiosyncracies surrounding the BoJ Rinban plan for

July and auction setup ahead of incoming longer dated supply. Futures -24 at

typing, not helped by an uptick in the offer/cover ratio during the latest round

of 3-5 Year BoJ Rinban ops. The cash curve has twist steepened.

- Aussie bonds have also run steeper, in sympathy with the moves seen in Tsys.

YM -1.0, XM -6.5. Local manufacturing PMI data saw a return to expansionary

territory, while the latest round of ACGB '28 supply saw strong pricing, even as

the cover ratio moderated.