The major global FI markets sit........>

BOND SUMMARY: The major global FI markets sit slightly higher in the 2nd half of

Asia-Pac trade as regional equities struggle. Comments from NY Fed's Logan (head

of mkt ops monitoring & analysis at the NY Fed) had little impact on U.S. rates,

as she discussed repo matters, Tsy purchases & bank reserve issues.

- Little interest was given to reports in the NY-Asia crossover suggesting that

North Korea has tested a "tactical weapon." The country has implemented similar

tests in recent times (including when negotiations with the U.S. have broken

down). Though this may have helped support FI in Asia.

- T-Notes last 123.00+, U.S. yields trade 1.7-2.5bp lower across the curve.

- The AU curve has reversed its early steepening, and more, with YM/XM at 50.5

and the cash equivalent at 46.5bp. YM last -1.0 tick, XM +1.0 tick. Bills trade

unch.-1 tick lower through the reds.

- JGB futures trade 17 ticks above settlement after a modest recovery overnight,

with yields a touch lower across the curve, and some modest flattening creeping

in on the back of a strong 5-15.5 Year liquidity enhancement auction.

- German FI a touch higher, Schatz +0.5 tick, Bobls +5.0 ticks, Bunds +22 ticks.