Traders have retreated to safe haven...>

BOND SUMMARY: Traders have retreated to safe haven assets after China threatened

to retaliate if the Hong Kong bill passed by U.S. House becomes law. The

document introduces annual reviews of the city's special trading status and

provides for penalties against officials "undermining fundamental freedoms and

autonomy in HK." This comes at a time of increasing uncertainty re: U.S.-China

trade relations. One eye remains on the ongoing Brexit talks, with negotiators

seemingly set to pull an all-nighter in an attempt to hammer out an accord.

- T-Notes trade +0-06 at 129-30+. Cash Tsys last seen 0.9-2.6bp lower across the

curve, with Eurodollars 1.0-3.5 ticks higher through the reds.

- JGB futures have jumped, last trade at 154.38, still 9 ticks below settlement.

Cash JGB yields sit -0.8bp to +1.3bp across the curve, with a modest degree of

twist flattening creeping in.

- Aussie bond futures have been bought on the Hong Kong; YM -1.5 & XM -3.0 in

the wake of yesterday's sell-off. Aussie yield curve is steeper, with yields

sitting 0.9-2.7bp higher. Bills last seen 1-2 ticks lower through the reds. The

AOFM tapped the mkt for A$800mn worth of the 2.50% 21 May 2030 ACGB.