After a rally in core fixed income.....>

BOND SUMMARY: After a rally in core fixed income markets towards the beginning

of the European session, momentum has shifted and Bunds are back to close to

flat on the day with Treasury futures a little lower on the day.

- Gilts saw some volatility around MPC member Silvana Tenreyro's speech at the

Resolution Foundation. Gilts originally sold off before spiking higher as she

said that downside risks could cause her to consider a rate cut (although this

wouldn't be needed under the Bank's central forecast). Gilts originally

recovered before Tenreyro said later in the Q&A that she will be watching very

closely how firms and households respond to Brexit before saying that she was

"talking about the coming months for the possibility for further stimulus".

- BTPs have been on the front foot, with spreads tightening more than other

peripherals today. There has been decent volume but no real news driving these

moves.

- TY1 futures are down -0-1 today at 128-27+ with Bund futures up 0.06 at 171.20

and Gilt futures up 0.33 at 131.54.