The risk-on feel to Asia-Pac trade,....>

BOND SUMMARY: The risk-on feel to Asia-Pac trade, driven by the regional

reaction to NY mkt moves & a BBG source piece pointing to a $1tn infrastructure

plan from the Trump admin, drove matters overnight. Still, T-Notes managed to

recover from worst levels, last -0-08 at 138-15+. The cash curve twist

steepened, with yields -0.2bp to +6.7bp, as the longer end was pressured by the

prospect of another bump up in Tsy issuance, if the touted infrastructure plan

comes to fruition. Another very healthy Asia session for T-Note volumes, > 145K.

- JGB futs were also pressured by the risk-on feel, with the BoJ's latest MonPol

decision meeting consensus. The 7-10 Year zone of the cash curve underperformed,

with the weakness in 7s perhaps pointing to a move that was at least partially

futures driven. Futures -20 on the day, back from the early afternoon lows.

- The Aussie bond space was also subjected to some steepening, with YM -0.5 & XM

-5.5 at typing. The RBA's June meeting minutes saw the board look to the shape

of the yield curve, noting that it if the kink at the front end persists then it

"would consider purchasing bonds in the secondary market to ensure that

short-term yields (1-2 Year) are consistent with the target for 3-year yields."