After a strong start to the European...>

BOND SUMMARY: After a strong start to the European session, core bonds hit their

highs of the day following a disappointing German IFO print and have now

retraced some of their gains. The disappointing German IFO follows yesterday's

disappointing PMIs, with the German manufacturing PMI particularly poor.

- Focus now turns to the ECB meeting with the vast majority of analysts

expecting today to set up easing in the September meeting. The most likely

change is that the forward guidance is changed by adding "or lower", indicating

that rate cuts are possible ahead. A brief statement will released at 12:45BST

with Draghi's press conference at 13:30BST. There have been some interesting

Euribor trades yesterday, see earlier comments for details.

- The ECB is not the only game in town today, durable goods orders will be

released in the US alongside trade, inventory and claims data.

- In the UK, Johnson is expected to set out his priorities while new Lib Dem

leader is reported to be considering an Early Day no confidence vote.

- TY1 futures are up 0-4+ today at 127-21 with Bund futures up 0.12 at 174.42

and gilt futures up 0.11 at 132.30.