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(Z1) Off Lows, But Remains Weak


Still Vulnerable


Bullish Price Sequence

BOND SUMMARY: Risk appetite returned ahead of high-level U.S.-China trade talks,
with working-level preparations already underway. Core FI faced pressure as
Asia-Pac equity benchmarks broadly advanced, with China back from a week-long
break. The blacklisting of several Chinese tech firms by the U.S., announced
after NY close, was seemingly shrugged. On the bright side, Beijing confirmed
that Vice Premier Liu & PBoC Gov Yi will take part in the upcoming negotiations.
T-Notes hover just above session lows, last trade -0-08 at 131-08+. Cash Tsy
yields +2.3-2.7bp across the curve. Eurodollars +0.5-4.5 ticks thru reds.
- JGB futures extended losses post-lunch and now trade at 155.02, 22 ticks below
settlement. Cash yields sit higher across the curve. Muted reaction noted to
local data releases, incl. wider than exp. BoP c/a surplus & in-line
earnings/spending data. A liquidity enhancement auction of off-the-run 5-15.5
Year JGBs was covered 2.680x (prev. 2.768x)
- Aussie YM last seen -2.5, XM -2.0. Cash bonds reopened after a long weekend,
yields trade 0.1-1.0bp lower across the curve. Bills 1-3 ticks worse off thru
reds. Little reaction seen to Aussie NAB biz. conf. survey & ANZ jobs adverts.