After some mixed French PMI data,......>

BOND SUMMARY: After some mixed French PMI data, the German PMI manufacturing

failed to rebound from last month's 80-month low as much as expected and

remained firmly in contractionary territory at 44.5. The weakness was largely

driven by poor export orders which fell at the second-fastest rate in ten-years

with weakness driven by autos and hesitancy from UK customers. Poor export

orders were also reflected in the pan-Eurozone print. Bonds rallied on the

German release and took another leg higher on the Eurozone print. There were

extremely strong volumes in Bund futures after both of these releases. There has

been some retracement in bonds following the stronger than exp UK retail sales.

- TY1 futures are up 0-9 today at 123-04+ with 10y UST yields down -3.8bp at

2.557% and 2y yields down -2.2bp at 2.379%.

- Bund futures are up 0.56 today at 164.86 with 10y Bund yields down -3.4bp at

0.045% and Schatz yields down -0.1bp at -0.577%. Peripherals are mixed on the

day with spreads widening for BTPs and GGBs but spreads tightening elsewhere.

- Gilt futures are up 0.24 today at 126.91 with 10y yields down -1.7bp at 1.217%

and 2y yields down -0.4bp at 0.778%.