Stronger than exp. headline official...>

BOND SUMMARY: Stronger than exp. headline official Chinese PMI data (released

over the weekend) set the tone for the session, with bonds trading heavy from

the off, even with several source reports out of Beijing pointing to the need

for tariff rollbacks in the Sino-U.S. trade war, while Axios noted that China

deal was now "stalled because of Hong Kong legislation" & that time is needed

"to allow Xi's domestic politics to calm." The "Phase One" deal with China would

probably happen "year-end at the earliest," Trump is expected to hold off on his

planned Dec tariffs to keep the deal alive. Two other sources close to the China

talks said several substantive obstacles remain. T-Notes -0-08+ at 129-03, with

the curve running steeper on the day; yields +1.2-3.8bp across the curve.

- A soft ACGB 2047 auction added some idiosyncratic pressure to the longer end

of the Aussie curve, even as generally soft local data crossed the wires. The

latest partials pointed to increased downside risks for Wednesday's Q3 GDP

print. YM -3.0, XM - 5.5. Bills 1-3 ticks lower through the reds.

- Continued speculation re: fiscal matters pressured the JGB curve, although the

5-10 sector underperformed as the BoJ bought 1-5 & 10-25 Year+ paper.