Trade war chatter remains in focus.....>

BOND SUMMARY: Trade war chatter remains in focus. A White House spokeswoman told

Fox News that the U.S. is "very optimistic" about a trade deal w/China, which

briefly applied pressure to core FI space. Meanwhile, mkts ignored comments from

a known trade hawk Navarro, who pointed to "no agreement at this time" re:

dropping tariffs on China as part of the phase-one deal. T-Notes +0-01 at

128-13+, after printing a low of 128-07 in reaction to the White House

spokeswoman's comments. Cash Tsy yields oscillate around neutral levels.

Eurodollars up to 1.0 tick higher thru reds.

- JGB futures have also recovered and trade -41 ticks vs. settlement at 152.79.

Cash yield curve is slightly steeper. Domestic earnings/spending figures were

better than exp. The focus turns to today's 10-Year JGBi supply.

- In Australia, YM -3.5 & XM -8.5. Similar dynamics as elsewhere in play, with

recovery from lows touched on U.S.-China optimism aided by a downgrade to the

2020 growth forecast in the RBA's most recent SoMP. Meanwhile, housing finance

data was mostly better than exp. Bear steepening evident in the cash yield

curve. Bills trade unch. to 3 ticks lower thru reds.