Core FI have drawn support from a......>

BOND SUMMARY: Core FI have drawn support from a deterioration in broader risk

appetite, reflected in regional equity markets. Australian press reported that

China has banned meat imports from four Australian abattoirs in what seems to be

another escalation of bilateral tensions. In regional data, China's CPI slowed

more than exp., while factory-gate inflation was more negative than forecast.

- T-Notes last seen +0-06 at 138-26 (off earlier highs), with yields sitting

0.2-1.3bp lower in cash trade & curve running flatter. Eurodollars trade unch.

to +1.5 tick thru reds.

- JGB futures opened on the backfoot, but have crept higher since and last sit

at 152.21, 1 ticks above settlement. Cash yields are lower across the curve.

- Australian YM is unch. & XM sits -0.5 tick. Yields trade a touch higher, with

belly outperforming. Bills trade unch. to -1 tick through the reds.

Aforementioned reports surrounding the Sino-Australian situation reversed the

early steepening. Local NAB Biz. Confidence printed at -46 vs. the prev. reading

of -66, with the survey including a grim reading re: employment. The next point

of note today is Treasurer Frydenberg's speech (main points covered earlier).