T-Notes lost altitude as U.S. equity...>

BOND SUMMARY: T-Notes lost altitude as U.S. equity index futures recoiled,

suggesting that yesterday's risk-off impetus is dissipating. The contract sits

-0-11 at its session low of 138-22+ as we type. Bear steepening is evident in

cash curve, as the space corrected yesterday's flattening. Eurodollar futures

last seen 1.75-4.0 ticks lower through the reds, after the Fed said it will

increase the minimum bid rates on its overnight & term repos.

- JGB futures rallied to a session high of 152.35 in the morning session, as the

Nikkei 225 reopened lower on a negative lead from Wall St. The contract shed

gains into the lunch break as local equities trimmed losses. JGB futures last

trade at 152.24, +7 ticks vs. settlement, with cash yields operating marginally

lower across the curve. The BoJ left the sizes of its 1-3 & 3-5 Year JGB

purchases unch. today. Japan's final industrial output figures were ignored.

- Australian YM is unch., while XM sits +2.25 after fading the initial uptick on

the back of familiar risk dynamics. Yield curve still runs flatter as we head

for the London morning. Bills last seen unch. to +1 through the reds.