Another day, another high for Bunds....>

BOND SUMMARY: Another day, another high for Bunds and gilts while USTs move

close to their recent highs. Overnight the PBOC set the daily fixing closer to

7, prompting more risk off flows.

- Furthermore, there have been a number of central banks that have cut rates

adding to the global easy money story. The RBNZ cut 50bps (25bps expected), the

RBI cut 35bps (25bps expected) and the Bank of Thailand cut rates 25bps (on hold

expected).

- Data in the Eurozone has also been largely disappointing with German IP

falling 5.2% Y/Y, the biggest Y/Y decline since November 2009 (although still a

long way off the 21.8% low seen in April 2009). The French trade deficit also

widened more than expected. There is no more top tier data today or tomorrow.

- TY1 futures are up 0-13 today at 130-05+ with Bund futures up 0.66 at 177.24

and Gilt futures up 0.59 at 134.58.