T-Notes operate around the mid-point...>

BOND SUMMARY: T-Notes operate around the mid-point of their Asia-Pac range. The

cash curve was subjected to some twist flattening in early trade, with the short

end under some modest pressure ahead of today's supply schedule which includes

3- & 6-Month Bills, in addition to 2- & 5-Year Notes. This has given way to more

conventional bull flattening, with 2-Year yields back at neutral levels, while

the long end has been supported by the worry surrounding Italy/trade matters.

T-Notes last 125-01, U.S. 10-Year cash Tsy yields last 2.306%. Eurodollar

futures +0.25-1.5 ticks through the reds.

- Little to pen for Aussie Bonds, futures struggle for direction ahead of

tomorrow's supply. YM +0.5 tick, with XM +1.0 tick. Bills unch.-2 ticks lower.

- JGB futures are 3 ticks higher. Today's 40-Year supply went well despite the

lack of concession, with flattening apparent on the curve. Month-end flows/a

lack of attractive FX-hedged foreign alternatives may have helped demand at the

auction.

- German FI futures sit a touch below settlement levels; Schatz -0.5 tick, Bobls

-1.0 tick, Bunds -5 ticks.