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Several regional factors during Asia...>

BOND SUMMARY: Several regional factors during Asia hours allowed Tsys to reverse
their early, albeit moderate, weakness, which was likely a result of regional
participants reacting to the latest FOMC decision. T-Notes last -0-01 at
129-11+, with yields 0.5-1.0bp lower across the curve.
- A fresh bid came into Aussie bonds on the back of the move higher in the
domestic unemp. rate, as the participation rate hit record levels. Meanwhile,
the larger than exp. headline emp. gain was driven solely by part time hires as
full time emp. fell. Elsewhere, underemp. edged higher. YM & XM +7.5 last.
Decent paying in IRM0 & U0 has been seen, with the strip last 6-8 ticks higher
through the reds. Chances of a 25bp cut at the RBA's Oct meeting now sit at
~80%, per the IB strip, with more of the sell-side getting on board with the
idea of a cut at that meeting in the wake of the uptick in the unemp. rate.
- JGBs drew further support from an unch. BoJ MonPol decision, and after the BoJ
noted that it will re-examine economic & price developments at the next meeting,
which could pave the way for further easing measures. Futures +38 ticks last,
with 5-10 Year sector of the curve outperforming.
MNI London Bureau | +44 0203-865-3809 |
MNI London Bureau | +44 0203-865-3809 |

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