T-Notes ticked lower as Chinese cash...>

BOND SUMMARY: T-Notes ticked lower as Chinese cash equities & U.S. equity

futures moved higher. T-Notes last down 0-01 at 124-08, off worst levels after

breaching Monday's low, with 10-Year cash Tsy yields at 2.421%. Eurodollar

futures trade 0.25 tick higher to 1.0 tick lower through the reds.

- It was a tale of 2 halves for AU bonds, initially pressured on the back of a

looser lending standards proposal from the APRA, before recovering in the wake

of the RBA's May meeting mins which noted that "members considered the scenario

where there was no further improvement in the labour market in the period ahead,

recognising that in those circumstances a decrease in the cash rate would likely

be appropriate." RBA Gov. Lowe then went one step further by stating that "a

lower cash rate would support employment growth & bring forward the time when

inflation is consistent with the target. Given this assessment, at our meeting

in 2 weeks' time, we will consider the case for lower interest rates." YM +2.5

ticks, XM +1.5 ticks. Bills +1-4 ticks through the reds, OIS price a 70% chance

of a cut next month, IB's ~90%.

- JGB futures in a narrow range. BoJ left size of 1-10 Year Rinban ops unch.