Positive headline flow from White......>

BOND SUMMARY: Positive headline flow from White House Press Sec Grisham pointing

to a "very, very optimistic" outlook re: a phase 1 trade deal with China was

quickly flushed out by trade advisor & well-documented hawk Peter Navarro, as he

noted that "there is no agreement at this time to remove any of the existing

tariffs as a condition of the Phase One deal. And the only person who can make

that decision is President Donald J. Trump. And it's as simple as that." This

resulted in choppy price action for Tsys, TYZ9 +0-03 at 128-15+, just off highs,

yields +0.2bp to 2.2bp & light twist flattening apparent.

- Aussie bonds followed broader risk sentiment, YM -3.0, XM -7.0, XM briefly

showed below its SYCOM lows. The RBA's SoMP revealed a downgrade to the Bank's

near-term growth profile, a slightly longer exp. re: the time frame for a return

to 2% underlying inflation & a flat wage growth profile over the forecast

horizon. Easing bias remained, discussion of -ves of easing in Oct seen.

- JGBs looked through announcements re: a Japanese stimulus package to combat

overseas risk, with details not yet finalised. Futures -34, curve steeper on the

day after early belly underperformance.