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

US TSYS: Core FI drifted lower in Asia-Pac hours, following the steepening

impetus seen in Tsys during NY trade, 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, alongside ongoing Sino-U.S.

tensions and related threats, helped limit losses in T-Notes overnight. Contract

last -0-03+ at 139-02, back from lows, in a tight -0-06+ range. Volume nears

115K lots for that contract ahead of European trade. Bear steepening apparent on

the curve, with yields unchanged to 1.9bp cheaper.

- Messrs Powell & Mnuchin offered little in their latest address. Meanwhile, NY

Fed President Williams noted that the central bank is analysing the potential

costs & benefits of yield curve control. Williams said "yield curve control at

the shorter end of the curve is really thought of, I think, mostly as a way to

support or reinforce forward guidance of the federal funds rate."

- The minutes from the Fed's most recent monetary policy gathering are due to be

released later today, with an address from Fed's Evans, as well as m'fing ISM &

ADP employment data also slated.