T-Notes continue to operate in.........>

BOND SUMMARY: T-Notes continue to operate in familiar territory as risk aversion

spilled over into Asia-Pac hours, last +0-02 at 138-30, on decent enough volume

of ~69K lots, given the China & Hong Kong holiday. Bulls seem reluctant to force

a test of recent range highs, at least for now, even with broader equity markets

trading on the defensive, perhaps that is a function of the lower liquidity in

Asia. Cash trade has seen bull flattening with yields 0.2-1.1bp richer across

the curve. Very little to pen re: headline news flow. Swaps spreads are little

changed across the curve.

- JGB futures were limited, backing off after failing to breach the overnight

session highs at the re-open, before edging higher again with the contract last

dealing +5. The belly lagged in cash trade, with strength in the long end seen

in the wake of a solid 20-Year auction (on the price front), even as the cover

ratio fell back in line with the recent averages.

- Little to pen for Aussie bonds, with the space running flatter in Sydney hours

on broader risk aversion, even against an active enough recent run of corporate

issuance. YM +0.5, XM +4.5.