A limited Asia-Pacific session thus far for...>

BUNDS: A limited Asia-Pacific session thus far for the German interest rate

futures space, with the major contracts operating in tight ranges, around

closing levels and shy of settlement prices. Bunds trade 74 ticks lower than

settlement, Bobls trade 7.0 ticks lower & Schatz trade 1.0 tick lower.

- Bunds ticked up early Weds, as the UK Tory party announced a leadership vote,

which PM May ultimately won, with the space easing in PM trade after reports

suggested that Italy was set to propose a 2.0% deficit/GDP, extending on news

that the new budget proposal sees a deficit goal of 2.04%. Participants continue

to watch for developments here, as well as matters surrounding the French

budget, with the French gov't set to face a no confidence vote later today in a

measure which forces officials to detail their spending plans.

- Focus Thurs falls on the aforementioned factors, as well as the final ECB

decision of '18, with the bank set to end asset purchases. There is a very high

bar to rowing back at this stage. However, the EZ econ outlook has deteriorated

& there are downside risks to inflation in light of the drop in oil prices.

Worth noting that UK PM is et to visit Brussels Thurs.