Several pockets of selling allowed.....>

BOND SUMMARY: Several pockets of selling allowed T-Notes to breach Thursday's

low, with consolidation below in the period since. There was little in the way

of outright +ve risk headlines, so the move may have represented some regional

follow through in the wake of the latest round of Fedspeak. On that front,

non-voter Kaplan made the rounds. He told CNBC that he would "like to avoid

having to take further action but I think I'm going to have an open mind about

taking action over the next number of months if we need to." He also spoke with

the WSJ, noting that it "was possible that the Fed would need to lower its

benchmark rate by a quarter-point again, potentially at its next meeting Sept.

17-18, but that he had not made up his mind yet about the exact timing of any

such move. I'm going to want to take as much time as possible." he said. T-Notes

last -0-07 at 130-02+, with light bear steepening in play.

- Aus paper followed the lead of Tsys, with some help from across the Tasman as

RBNZ Gov. Orr pointed to a wait & see approach, even as the Bank stands ready to

cut rates, if needed. YM -4.0, XM -6.5. Bills 1-4 ticks lower through the reds.

- JGB futures in a tight range, -6, yields a touch higher across the curve.