Worries re: trajectory of U.S.-China...>

BOND SUMMARY: Worries re: trajectory of U.S.-China trade relations persist as

participants weigh yesterday's BBG report suggesting that China has little

appetite for a long-term deal w/Trump. On the topside, however, China's Caixin

m'fing PMI was the strongest in >2yrs. T-Notes edged into negative territory on

the Chinese PMI print; they last trade -0-01+ at 130-08. Cash Tsy yields sit a

touch higher across the curve. Eurodollar contracts are unch. to -1.5 tick.

- JGB futures have been bid from the off and last sit at 154.44, 49 ticks above

settlement. Cash JGB yields have dropped across the curve. An unexpected uptick

in Japanese unemployment may have provided some support. Elsewhere, the BoJ left

the size of its 5-10 Year Rinban ops unchanged today.

- In Australia, YM +2.0 & XM +3.0. Aussie yield curve runs flatter, with yields

1.9-3.0bp lower across the curve having played catch-up to the overnight move in

U.S. Tsys at the open. Bills trade unch. to 2 ticks higher through the reds. The

AOFM published its weekly issuance schedule earlier today and auctioned A$800mn

worth of 1.50% 21 Jun 2031 ACGB, attracting bid/cover ratio of 3.86x vs the

prev. 2.16x (albeit the size of the prev. supply was A$1.2bn).